
More Squawk from Jim Cramer: Sports Authority 'Skunked' Under Armour (UA) and Nike
NEW YORK (TheStreet) -- Shares of Under Armour (UA) - Get Report are falling 5.19% to $35.77 late Wednesday morning after the sports apparel retailer revised its full-year forecast after a bankruptcy court approved the liquidation of Sports Authority's business.
TheStreet's Jim Cramer likened Sports Authority's closure to that of home retailer Linens n' Things and electronics company Circuit City. It was "here today, gone tomorrow," Cramer said on CNBC's "Squawk on the Street" this morning.
"Sports Authority really skunked a lot of people," Cramer added. "Under Armour sent millions of dollars of inventory and is getting very little back."
But Under Armour is benefiting from Golden State Warrior MVP Steph Curry's basketball footwear, Cramer noted.
Morgan Stanley said in a note today that the footwear line has taken 800 basis points of share from Nike (NKE) so far this year.
Curry is "electric" and "that is an endorsement business," Cramer said.
Additionally, Morgan Stanley downgraded Nike stock to "equal weight" from "overweight" and BofA/Merrill Lynch slashed its rating on the shares to "neutral" from "buy."
Morgan Stanley said the U.S. apparel industry is weakening and there is heightened competition as consumers shift to online spending.
Shares of Nike are lower by 0.74% to $54.81 on Wednesday morning.
"My take overall is that you don't need to own one of these (stocks)," he added in the above video.
Morgan Stanley also said Adidas (ADDYY) "strategic" changes are helping the brand regain momentum.
"Adidas is back," Cramer added, noting that many people had written off the company.
(Under Armour is held in the Growth Seeker portfolio. See all of the holdings with a free trial)
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B- on Under Armour stock.
The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, compelling growth in net income, good cash flow from operations and expanding profit margins.
The team believes its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: UA










