Under Armour Gets Downgraded on ‘reputational risk’

Under Armour, Inc. (NYSE: UA) was downgraded by Susquehanna Financial, which cited that the company CEO’s recent comments on President Donald Trump may hurt the brand’s reputation and stock price. Susquehanna International Group analyst Sam Poser cut its rating for Under Armour to negative from neutral and lowered the target price to $14 from $24, representing a 35 percent downside from Tuesday’s close.

“Regardless of CEO Plank’s political views or whether his comment was meant to be a Trump endorsement or a general opinion, we believe the decision to express a view in today’s highly charged political climate was a mistake. In this case, perception is reality,” analyst Sam Poser wrote in a note to clients Wednesday. The “polarized political climate and the pointed response by Stephen Curry make it nearly impossible to effectively build a cool urban lifestyle brand in the foreseeable future.”

Under Armour CEO Kevin Plank called Trump was a “real asset” when he was in an interview with CNBC on Feb.7. Some of the company’s own celebrity endorsers have spoken out against Mr. Plank’s comments, including the NBA superstar Steph Curry.

“At this point we don’t believe Under Armour is in danger of losing Steph Curry,” Poser said. “However, it simply cannot be good for business if the face of Under Armour spoke out so pointedly against the CEO’s comments. Other Under Armour brand athletes such as Dwayne ‘The Rock’ Johnson and Misty Copeland have also spoken out against Mr. Plank’s comments.”

Under Armour shares rose 0.52 percent to $19.51 in the early trading. The stock had fell as much as 22.5 percent this year.

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