Under Armour UA 0.97% has problems, but its Taiwan suppliers will likely not be impacted as much as the market seems to think.

According to Morgan Stanley analyst Terence Cheng, the recent selloffs in Under Armour suppliers Eclat, Makalot and Toung Loong Textile are overreactions to potentially softening Under Armour sales growth.

“While we understand Taiwanese textile suppliers’ share prices tend to correlate with global branded customers’ performance/share prices, we believe Taiwanese companies’ diversification of customers and product offerings should not be viewed the same as iPhone suppliers that fundamentally concentrate on single customer/single product,” Cheng explains.

Yesterday, Morgan Stanley analyst Jay Sole reiterated his bearish thesis on Underweight-rated Under Armour, highlighting slowing growth in women’s apparel and a “soft” running footwear market.

While these trends are bad news for Under Armour suppliers, Cheng assures investors that their exposure is limited. Morgan Stanley estimates…

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