Apparel and retail just can't catch a break. This morning we have a horrendous hit on Under Armour (UA) by Morgan Stanley. It's a total shadow-box hit, in that the headline says, "Why We're Staying UW Even Though 1Q Looks Solid."
That's the kind of thing that says, "We don't even care how the company is doing now, it's slowing and you need to get out because it's going to $32 -- the price target."
The basic gist: UA is losing pizazz and it ain't coming back. (Under Armour is part of TheStreet's Growth Seeker portfolio.)
What I find interesting about this downgrade is that Lululemon (LULU) is being hit off this and LULU just reported a monster good quarter that showed an acceleration in sales and earnings.
Incredibly, LULU is almost back to where it was before it reported the monster good quarter. That just seems wrong to me given the momentum LULU has.
I don't think UA is losing it the way MS thinks it is. Kevin Plank has shown an uncanny way to reinvent the company and produce new product, and I continue to think this analyst does not give enough credit to the health-and-wellness aspects of the company. UA is more than just apparel.
Same with LULU, which is apparel and lifestyle with a tailwind of yoga that's getting stronger.
Just pointing these out, I like 'em both, especially LULU.
