Pro Analysis

Top analyst downgrades Under Armour on valuation

Under Armour
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Argus Research downgraded shares of Under Armour to hold from buy on Wednesday, citing high valuation and the potential impact of the apparel maker taking on additional debt to subsidize expansion efforts.

"While revenue is likely to remain strong, we think that further expansion will require substantial business investment, which will add debt and interest expense and weigh on earnings growth," equity analyst John Staszak wrote in a research note. "In addition, Under Armour trades at a high current-year P/E, well above the average for apparel companies in our coverage group, and we see little room for further improvement."

Staszak is among the best analysts on Wall Street, according to TipRanks, which shows that his average calls post an average one-year return of greater than 12 percent. That track record places him among the top 200 analysts on all of Wall Street, according to the website.