MORGAN STANLEY: Stephen Curry could be worth $14 billion to Under Armour

Morgan Stanley is bearish on Under Armour.

But Steph Curry could change everything.

Jay Sole, an analyst at Morgan Stanley, released a note diving into Under Armour's business in which he came out impressed but not encouraged.

"We believe that Under Armour is a terrific company with exceptional management and much growth ahead of it," he wrote.

"However, the question is whether UA's growth will justify the stock's 65x [price to earnings ratio]. We don't think so."

The stock is trading at just over $82 a share, but Sole has a target price of $64 a share and an underweight rating. Sole argues throughout the note that the company is no longer in its infancy and that, with sales possibly slowing, the stock is too expensive.

There is one person, however, who could change it all for the company: reigning NBA MVP Steph Curry.

"UA's US basketball shoe sales have increased over 350% YTD," the note said.

"Its Stephen Curry signature shoe business is already bigger than those of LeBron, Kobe, and every other player except Michael Jordan. If Curry is the next Jordan, our call will likely be wrong."

Sole named his bull case for the stock "Spicy Curry," with a price target of $127.50, and said it would become "the world's No. 2 athletic brand" based on the performance and popularity of Curry.

If Curry continues his streak, the difference in market-cap value of the company could be approximately $14 billion, with Under Armour being valued at about $14.1 billion under Sole's base case and $28.2 billion in his bull case.

He said the exploding growth in UA's basketball business could even threaten Nike. Here's Sole (emphasis added):

UA's total basketball business is probably double (in terms of retail sales) and even its non-Curry styles have grown ata super-high rate. The growth could be a result of UA taking share by underpricing its shoes. Or it could be a tipping point signaling the end of Nike's basketball dominance. If the latter is true or Curry becomes the next Michael Jordan, our call might wrong no matter what UA does in women's apparel or running footwear. This will be especially true if the Curry effect is so strong, he puts a halo over the entire brand which benefits its apparel and running footwear businesses.

This huge Curry impact has not gone unnoticed by Under Armour.

CEO Kevin Plank has consistently mentioned Curry as a source of the company's outperformance, and the company has focused much of its advertising on the Warriors star.

The problem, Sole said, is that Under Armour's business is dependent on Curry right now, and if Curry-mania cools off, the basketball business may not grow fast enough to meet this lofty goal.

"We also note Curry is arguably the NBA's most popular player," Sole wrote.

"Kids who are buying his shoes probably want to purchase a little piece of Curry's greatness, no matter what brand he is associated with. They may not necessarily be buying his shoe because it is a UA shoe. Plus, we don't believe UA has penetrated the 'Sneakerhead' market with its basketball footwear offerings" (a "sneakerhead" is a collector, trader and admirer of sneakers).

This means Curry will have to sustain his greatness and the company will have to penetrate the market of sneaker trendsetters to make the bull case come true.

But based on how Curry is playing right now, if anyone is going to do it, it's him.