The stock market is likely following the polarized political atmosphere in a respective category, in which certain stocks are situated to win or lose if President Donald Trump’s policy goals are achieved.
After Under Armour was tagged as the worst-performing S&P 500 stock since the US election, it seemed that it could finally bounce back on Trump trade, no matter which side will prevail, as the stock can find support with Trump’s agenda that will outweigh the positives.
In a written report on Friday, Goldman Sachs said that the apparel manufacturer is among the biggest winners if Trump manages to ratify tax reform, including corporate tax cuts. The company pays a 39% of 10-year median tax rate, citing it is one of the highest effective tax rates in the U.S.
"Firms with the highest effective tax rates should eventually outperform," the team of Goldman Sachs analysts led by David Kostin wrote in the note to clients.
Additionally, both Under Armour and Kostin referenced Nordstrom with 39% tax rates and Gap with 38, noting as one of the major beneficiaries of tax reform.
However, there are still potential headwinds over Trump’s platform as it could end up flopping for Under Armour, considering other stimulus plans could be harmful to the retailer’s business that could drag down stocks of the company.
Further, if Trump’s agenda over heavy import tariffs on U.S. companies in a bid wins, then the company as a whole would carry a much hefty tax bill.
Price Review of Stock
Shares of Under Armour, Inc. declined -0.66% during the course of the session and stood at $19.65, with a trading volume of 8.7 million shares, topping the average volume shares of 5.76 million.
Meanwhile, the company’s return on assets ratio for 12-month period was 5.70%, while the return on equity ratio settled at 10.60%, and its return on investment ratio recorded 10.00%.
Earnings per share (EPS) growth for this year stood at -57.70% and EPS growth for next year is expected to record 24.11%.
The chart below illustrates Under Armour, Inc. stock amid growing concerns over President Donald Trump’s proposed agenda for ratifying tax reforms including corporate taxes. The stock is currently trading at $17.99 in a light trading volume.
Given a constant consolidating path on the stock, it is quite luring investors’ attention as it could influence the market once it radically shows a sudden movement.
As shares of Under Armour, Inc. held steady on a consolidating path, it is expected that market participants could include the apparel manufacturer on their watch list until any further movement in the wake of Trump’s stimulus plans.
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