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Under Armour website
Under Armour website

Eye on Equities

Long-term forecast sparkles for Under Armour Add to ...

Sportswear maker Under Armour Inc. raised revenue guidance for this year after stitching impressive third-quarter results as profit climbed 32 per cent.

Under Armour boosted its revenue forecast to between $1.46-billion (U.S.) and $1.47-billion for 2011 from a previous prediction of between $1.42-billion and $1.44-billion. Its “charged cotton” clothing, which is meant to dry faster than ordinary cotton, has helped sales, while the firm is rolling out new footwear for running and basketball.

“Given the uncertainty within the consumer landscape, we believe this type of guidance should be viewed quite positively as it speaks to the visibility the company has into 2012,” Canaccord Genuity analyst Camilo Lyon said Wednesday in a research report.

Under Armour is a “unique long-term growth story that has multiple growth revenues coupled with an improving gross margin picture in the second half of this year,” he wrote.

Upside: Using 2013 estimates, he is maintaining a “buy” rating on Under Armour, and raised his one-year target by $17 to $102 a share.

Progressive Waste Solutions Ltd.

The waste management giant missed third-quarter profit estimates and expects lower pricing to continue in certain markets.

“The company’s longer-term business trajectory is still intact; however, we are somewhat concerned regarding pricing and competitive trends in the U.S. northeast,” said TD Securities analyst Stephen Chang.

Downside: Mr. Chang reduced his one-year target by $3.50 to $29.50 a share, and lowered his rating to a “buy” from “action list buy.”

Canadian National Railway Co.

Canadian National Railway’s strong third-quarter results continue to demonstrate “why the company is often regarded as North America’s Class 1 railroad operator,” said Raymond James analyst Steve Hansen. But its shares are now “fairly valued at current levels,” he said.

Upside: Mr. Hansen raised his one-year target by $4 to $80 a share, but is maintaining his “market outperform” rating.

Astral Media Inc.

The specialty broadcaster reported strong fourth-quarter results, but management has indicated that uncertainty in global markets “may start to have an effect on advertising,” said CIBC World Markets analyst Robert Bek. “The company sees weakness in early 2012.”

Downside: Mr. Bek maintains his “sector perform” rating, but reduced his one-year target by $1 to $42 a share.

Canfor Pulp Products Inc.

Canfor Pulp Products will be affected by lower pulp prices and weaker Chinese demand, said Dundee Capital Markets Richard Kelertas. “The printing and writing sector will likely experience much less of a seasonal boost in demand during the usually strong fall months.”

Downside: The analyst is maintaining his “neutral” rating, but cut his one-year target by $2 to $14.50 a share.

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