NEW YORK (TheStreet) -- Shares of Under Armour (UA) were gaining in mid-morning trading on Tuesday after the sportswear retailer agreed to be Major League Baseball's official on-field uniform provider starting in 2020, sources told ESPN.
This marks Under Armour's first professional sports uniform deal. The company lost a bid to be the official provider of National Basketball Association uniforms to competitor Nike (NKE), ESPN notes.
"This represents a big step for Under Armour with MLB representing an on-field presence in one of the top four professional leagues in the U.S. (Nike controls NFL and NBA, Adidas (ADDYY) controls NHL)," Stifel wrote in a note cited by Barron's.
"The marketing benefits are tangible though unclear is the opportunity cost for the expense (i.e. the additional basketball players or global football stars who might have been signed using those dollars)," the firm added.
(Under Armour is held in the Growth Seeker portfolio. See all of the holdings with a free trial.)
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C+.
Under Armour's strengths such as its robust revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures are countered by weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and premium valuation.
You can view the full analysis from the report here: UA
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.