Under Armour Inc. (UAA) - Get Report shares were indicated higher in pre-market trading after analysts at Raymond James boosted their rating on the stock amid the overhang of a federal probe into its accounting practices.  

Raymond James analyst Matthew McClintock kept his price target on the stock unchanged at $30 a share, but lifted his rating to "strong buy" from "outperform", citing comfort with the sports apparel group's risk/return profile and execution risk. McClintock said Under Armour was ahead of schedule with respect to new product sales and argued the headline risks linked to a recent Department of Justice investigation might be less than first feared.

Under Armour shares were marked 5.9% higher at the start of trading Wednesday to change hands at $19.07 each, but have fallen 10% since the group confirmed an ongoing investigation into its accounting practices by federal regulators on November 3.

Under Armour said it is co-operating with investigations from both the Securities and Exchange Commission as well as the U.S. Department of Justice after the Wall Street Journal reported the two agencies were looking into the company's revenue recognition accounting, which it said was used to flatter sales from quarter to quarter.

Under Armour said its "practices and disclosures were appropriate" and has been responding to requests for documents since July 2017 "relating primarily to its accounting practices and related disclosures."

Looking into the final months of 2019, Under Armour said it expects full year earnings at the higher end of its prior forecast of between 33 cents and 34 cents per share, and said revenues would be about 2% higher than 2018 thanks in part to lower-than-expected excess inventory, down from its previous estimate of an increase of between 3% and 4%.

"Building our long-term brand strength remains at the center of everything we do," said outgoing CEO Kevin Plank. "Our ongoing transformation across the business continues to make us smarter, faster and more operationally excellent. As we make the turn into 2020, we are confident in our ability to deliver our fourth quarter targets while proactively supporting higher levels of strategic marketing investments that will further fuel the Under Armour brand."

Plank announced his departure from the group on October 22, but made no mention of the federal probe during his transition statement, in which named chief operating officer Patrick Frisk as his successor.