Lululemon and Under Armour are clipped at Jefferies on concerns demand will disappoint
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Jefferies resorted its ratings in the athletic apparel sector on its view that the pandemic pulled forward much consumer demand in the sector.
Analyst Randal Konik and team cut Under Armour (NYSE:UAA) to a Hold rating from Buy with a price target of $10 on concerns over the tough comparisons upcoming. The firm also sliced Lululemon Athletica (LULU) to an Underperform rating from Hold. The firm said it anticipates LULU having difficulty entering new categories without a strong roster of ambassadors and sponsors like peers like Nike (NKE), Adidas (OTCQX:ADDYY), and Under Armour (UAA). The current male ambassador list for LULU of Joe Wicks, Jordan Clarkson, and Matt James is seen as lagging in particular.
Despite the concerns on the sector, Jefferies kept its Buy rating on Nike (NKE) and said it was still best in class.
Shares of LULU fell 4.32% premarket on Monday to $280.72. Under Armour (UAA) was down 3.01%. Nike (NKE) peeled off 1.19% and Adidas (OTCQX:ADDYY) was off 1.45%.
Compare profitability, growth, and valuation metrics on Lululemon, Adidas, Nike, and Under Armour side by side.