NEW YORK (TheStreet) -- Shares of Under Armour (UA) were higher in late afternoon trading on Monday, despite being down more than 60% year-to=date. In addition, competitor Nike (NKE) is down by over 18% year-to-date.
Morgan Stanely (MS) apparel analyst Jay Sole joined CNBC's "Power Lunch" on Monday afternoon to talk about the athletic apparel stocks.
The firm has an "underweight" rating on Under Armour, he said. While the company has an "outstanding" brand and "exceptional" management team, Morgan Stanley doesn't see as much growth in its future as other analysts on Wall Street. "We think the growth will be very good," he said. "[Wall Street] thinks the growth will be great."
Under Armour has a "lot of great products" coming up, but Wall Street still needs to "get a little bit more in line with what they'll do next year," Sole claimed.
For the sector, Adidas is "the story of 2016," he noted. Adidas has had a "great comeback" due to new products that have been met with strong demand, as well as strong celebrity endorsements, such as rapper Kanye West, he said. This positive momentum should continue into 2017 and will affect both Under Armour and Nike.
As for Nike, it's working on new products and trying to position itself for a "high" 2017, Sole said. If consumers respond positively to it new products, then that could "affect our view" of the stock, he said. The firm has an "equal weight" rating on the stock.
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Separately, 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.
TheStreet Ratings team rates Under Armour as a Buy with a ratings score of B-. This is driven by some important positives, which the team believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks the team covers.
You can view the full analysis from the report here: UAUA data by YCharts