Morgan Stanley told investors Under Armour shares are now fairly valued after its recent plunge. The firm upgraded the company to equal-weight from underweight.
Under Armour shares are down 27 percent year-to-date, with most of the decline occurring after the company gave weaker-than-expected 2017 sales guidance on its Jan. 31 fourth-quarter earnings report. The shares are also down 46 percent in the previous 12 months.
"The stock now discounts more reasonable long-term assumptions. … While we see some execution risk near-term and a wide risk/reward, our view is this outlook is much more realistic than before," analyst Jay Sole wrote in a note to clients Tuesday. "We believe the Under Armour brand has sustained some damage, but overall remains solid. … We think the stock can hold its current level."
