If anybody around here needs a bit of good news to help them get through the holiday season it’s Under Armour (NYSE:UA). Last month, the founder of the company Kevin Plank announced he would be stepping down from his position as CEO on January 1st, 2020.
This news was followed by the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DoJ) beginning an investigation into the accounting practices of the company. The investigation will revolve around whether Under Armour moved sales across quarters to appear healthier.
Why Did the Stock Jump?
So with a new CEO on the way and the SEC and DoJ having the company in their crosshairs, why did Under Armour stock jump? Is it because incoming CEO Patrick Frisk is one of those quirky people who work better when their company is being federally investigating? No. It is absolutely not that.
The company is up because analysts from the firm Raymond Jones have boosted their rating of the stock from “outperform” to “strong buy”. The decision was based on Under Armour’s promising figures related to new product sales and a downgrading of risk involved with the ongoing federal investigation. The firm’s price target for the stock is set to $30, which, if reached, would be about a 70% return on investment if you buy at Under Armour’s current share price.
So, on a day famous for fighting tooth and nail for a discount and a “strong buy” means stiff-arming three people to get to the cash register, maybe Under Armour is the best bargain out there this Black Friday?
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in Under Armour. Read our full disclosure policy here.
Content Manager at MyWallSt
Michael's first and favorite stock is Square, which he sees becoming a massive player in the payments industry and a leader in the war on cash.