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Under Armour Named a Top Investing Idea for '22 at Baird

Under Armour shares climb as a Baird analyst names the sports-apparel company one of his top 2022 ideas.

Under Armour  (UAA) - Get Under Armour, Inc. Class A Report  (UA) - Get Under Armour, Inc. Class C Report shares were  climbing Tuesday after Baird upgraded the sports-apparel company to outperform from neutral.

The Class C shares of the Baltimore company at last check were up 2.5% to $18.52.

Analyst Jonathan Komp affirmed his $32 price target, as he repositions for 2022 in the apparel, footwear and fitness space, according to the Fly.

With valuation multiples in the space unlikely to broadly rerate higher, Komp said, he is concentrating his bets behind companies with visible cyclical earnings recovery prospects, naming Under Armour and Planet Fitness  (PLNT) - Get Planet Fitness, Inc. Class A Report as his top 2022 ideas.

Planet Fitness CEO Chris Rondeau said Monday that the omicron variant has not had seriously deterred people from going to the gym to work out.

Last month, Wells Fargo resumed coverage of Under Armour with an overweight rating and a price target of $33 a share, citing strong fundamentals and crediting Chief Executive Patrik Frisk for his turnaround strategies.

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Frisk took over as chief executive of the apparel brand at the end of 2019 after Founder Kevin Plank stepped down. Frisk has instituted a roughly $525 million to $575 million restructuring, yielding a significantly "cleaner" expense base, Wells Fargo analysts said.

Sales of Under Armour in 2017 had hit a wall and the company laid off nearly 300 employees and lost several top executives.

In November, Under Armour posted stronger-than-expected third-quarter earnings and boosted its 2021 sales forecast as shoppers returned to brick-and-mortar stores and returned to its brand.

Earnings came in at $145 million, or 31 cents a share, more than double the 15-cent-per-share estimate of analysts polled by FactSet.

Revenue rang in at $1.5 billion, up 8% from $1.43 billion a year earlier and in line with analysts' forecasts.

Under Armour is scheduled to report fourth-quarter earnings on Feb. 9.