Under Armor Stock could have a great 2022. Here’s why.

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Under Armor shoes.

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Actions of

Under protection

are a good bet for 2022 thanks to its earnings outlook and revenue potential, according to Baird.

Class A shares (ticker: UAA) of the sportswear retailer rose 1.2%, to $ 21.49, on Tuesday’s trading. In 2021, class A shares returned 23.41%, while class C (UA) shares – which do not carry voting rights – returned 21.24%, according to the Dow Jones Market data. The long-term outlook for the company looks solid.

Baird analyst Jonathan Komp upgraded the stock to an outperformance rating with a price target of $ 32, up 49%, from his previous neutral rating with the same price. He cited several reasons for this in a research note on Tuesday.

“We have warmed to the history of the SAU for much of the past year based on our positive view of leadership transformation actions aimed at improving sales at full cost in North America,” said writes Komp.

The company’s return on marketing investment has bode well so far. These investments will continue until 2022, CEO Patrik Frisk said during the company’s third-quarter earnings call with investors in November.

Revenue growth is expected to be 25% for the full year, up from previous forecast in the low 20% range, the company said in November. Margins are forecast to increase 1.3 percentage points, up from previous forecast of a 50 to 70 basis point improvement from adjusted gross margin of 48.6% last year. (One basis point is equal to 1 / 100th of a percentage point.)

Komp thinks it’s a conservative outlook.

“Based on signs of continued momentum and, in our opinion, limited discount activity, we see the potential for UAA to beat the implied fourth quarter revenue target by around 5%,” he wrote.

Komp also expects adjusted annual earnings per share to exceed 80 cents.

Write to Logan Moore at [email protected]

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