Research firm Bernstein started coverage of Nike (NKE) with an Outperform rating and launched coverage of its competitor, Under Armour (UA, UAA), with an Underperform, the equivalent of a sell rating. The firm expects Nike’s share gains to continue and predicted that Under Armour would not be able to resume its previous growth rate of above 20% on a consistent basis.

NIKE: Nike’s innovation, strong R&D, and ability to pay athletes for endorsements will enable its share gains to continue, wrote Bernstein analyst Jamie Merriman. The analyst says that Nike’s shift to a direct to consumer model has slowed its growth in North America, but its fundamentals remain strong, as consumers continue to have a positive view of its products. Merriman expects the company’s North American sales to beat expectations by 3.4% in fiscal 2018 and 5.6% in fiscal 2019. Also likely to push the stock significantly higher are the company’s revenue and earnings growth, the analyst wrote. She placed a $69 price target on the name.

UNDER ARMOUR: The company’s new categories and channels are both problematic, according to Merriman. Its direct to consumer footwear sales remain anemic, as its products in that category are rated below those of its competitors, she wrote. Meanwhile, Under Armour has created difficulties in its wholesale business by delivering products to Kohl’s (KSS) that are more similar to its merchandise at Dick’s Sporting (DKS) “than we would expect,” Merriman stated. Dick’s is looking to lower the prices it charges for Under Armour’s products, which could damage the apparel maker’s brand, according to the analyst. Predicting that Under Armour’s 2017 and 2018 results would come in below expectations, she set a $14 price target on the name.

PRICE ACTION: In morning trading, Nike rose 1% to $53.62 and Under Armour lost 0.5% to $17.35.