The higher target price - which translated into a 2% gain Monday to $24.17 for Under Armour shares - follows a healthy quarter and restructuring for the company and a meeting between Stifel and top Under Armour executives.
Under Armour is ending the year with a "strong team, clear strategic vision and as a much stronger Company than just a few years ago," wrote Stifel analyst Jim Duffy in a report provided to TheStreet. "The past 12 mos. were about stabilization, clarity, and simplification. Entering 2019, we see a number of tangible margin drivers in place for strong profitability improvement, and expect sell-through improvement across 2019 from better product translates to revenue acceleration into 2020."
Under Armour will likely grow into a $6 billion-plus business with $1 in earnings power in 2021, added Duffy.
"The next 12 mos. will be a wave of capitulation from backward looking bears. We are raising our target to $30 and reiterate our Buy rating," the analyst wrote.
Under Armour's revenue rose 2% to $1.4 billion during the third quarter and net income hit $75 million, or 17 cents a share. Adjusted net income was $112 million, or 25 cents.
Stifel met last week with Under Armour management, including President Patrik Frisk and Chief Financial Officer Dave Bergman.
"We left the meetings impressed by Under Armour's organizational progress in the past 12 mos. and more confident in our margin improvement thesis," wrote Duffy. "The strategic focus and operational influence of Mr. Frisk, along with the buy-in of Chairman and CEO Kevin Plank and the broader leadership team has transformed the culture of the organization and made Under Armour a much stronger Company in a short period of time."