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Pro Analysis

Buy Under Armour because social media sentiment is improving, Jefferies says

Kevin Plank, CEO of Under Armour.
Adam Jeffery | CNBC
Kevin Plank, CEO of Under Armour.

Jefferies reiterated its buy rating on Under Armour, citing better social media data trends, which point to rising consumer brand sentiment.

Under Armour shares are down 34 percent this year through Tuesday, 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 55 percent in the previous 12 months.

"Our data analysis indicates a bottom forming in the social sphere for UA. The work shows the social share gains at Adidas in '16 have peaked and provides evidence that UA's sponsorship strategy is lifting brand heat," analyst Randal Konik wrote in a note to clients Wednesday. "Taken together with our work that athletic trends are healthy, the UA brand is strong, and its global growth opportunity large, now is the time to buy UAA."