Under Armour, Inc. (UA) shares rose 3% during Monday's session after a series of analyst upgrades and revised price targets following better-than-expected financial results for the athletic apparel maker.

Key Takeaways

  • Under Armour shares rose 3% during Monday's session after a series of analyst upgrades and revised price targets.
  • Stifel, Deutsche Bank, Barclays, and B. Riley Securities all upgraded the stock and/or raised their price targets following Friday's earnings.
  • The stock experienced a golden cross of the 50- and 200-day moving averages but could see some consolidation before making new highs.

Stifel analyst Jim Duffy upgraded the stock to Buy with a price target of $17.00 per share, citing improved revenue quality, sightlines to revenue inflection in 2021, gross margin drivers from product mix, and a streamlined expense base that points to earnings leverage.

An inflection point is an event that results in a significant change in the progress of a company, industry, sector, economy, or geopolitical situation and can be considered a turning point after which a dramatic change, with either positive or negative results, is expected to occur.

Deutsche Bank, Barclays, and B. Riley Securities each issued their own upgrades and/or revised price targets following Under Armour's financial results on Friday, with price targets of $15.00, $14.00, and $13.00, respectively. That said, several analysts pointed to low expectations and are still awaiting further confirmation of a brand turnaround.

Chart showing the share price performance of Under Armour, Inc. (UA)
TradingView.com

From a technical standpoint, the stock experienced a golden cross of the 50- and 200-day moving averages following Friday's earnings announcement and Monday's early gains. The relative strength index (RSI) is approaching overbought levels with a reading of 67.42, but the moving average convergence divergence (MACD) remains in a bullish uptrend. These indicators suggest that the stock could see consolidation before extending its move higher.

Traders should watch for consolidation above trendline support levels of around $11.00 over the coming sessions. If the stock breaks down, traders could see a move toward trendline support levels near $10.25, although that scenario seems less likely to occur given the bullish fundamental sentiment. If the stock rebounds higher, traders could see a retest of prior highs near $13.50 over the coming sessions.

The Bottom Line

Under Armour shares moved higher during Monday's session after several analysts upgraded and/or raised their price target on the stock following the company's earnings report. While the stock experienced a golden cross of its 50- and 200-day moving averages, traders could see some consolidation before the stock resumes a bullish trend higher as it approaches overbought conditions.

The author holds no position in the stock(s) mentioned except through passively managed index funds.