Market Overview

What Everyone's Saying About Under Armour's New CFO

  • Under Armour Inc (NYSE: UA) announced on Tuesday that it had appointed Chip Molloy as its new Chief Financial Officer.
  • Molloy was picked to replace the current CFO, Brad Dickerson, who will leave the company in February.
  • Responding to the news, shares were trading up roughly 2 percent on Wednesday morning. But, what are experts saying about the event?

After Under Armour appointed Chip Molloy, former CFO of PetSmart, Inc. (NASDAQ: PETM), as its new CFO, several major Wall Street research firms weighed in on the under-new-management company.


Canaccord analysts Camilo Lyon and Pallav Saini reiterated a Buy rating and $130 price target on shares of Under Armour, classifying Mr. Molloy as “a strong addition to the UA team.” They noted that the new CFO does not only have extensive experience in the retail segment, but more importantly, that “he is a strong cultural fit for the company. He is a Maryland native, a graduate of the Naval Academy, a former Top Gun fighter pilot, and a former collegiate wrestler.”

The experts anticipate the combination of his experiences and skill set will be a good fit for the Under Armour culture, “in which a strong voice is needed.”

Finally, they pointed out that, while Molloy will assume his new role on January 19, the outgoing CFO will continue to work with the company through February to ensure a smooth transition.

Piper Jaffray

Piper Jaffray analysts Erinn E. Murphy and Christof R. Fischer seem less bullish on the company, even in spite of the new CFO, as they reiterated a Neutral rating and $88 price target on the shares.

“Management believes he is a good cultural fit and has a solid background as a public-company CFO in the consumer space. We believe he has spent ~3 months in dialogues with UA and note he is a local hire,” a report issued Wednesday explicated.

From a cultural standpoint, Molloy “has an athletic aptitude and was a Navy fighter pilot for 10-years,” the experts went on to expound. “While the announcement of a new CFO does put one of our concerns aside, we still believe current trends remain sluggish tied in part to warm weather & in part to higher inventory in the channel.”

Brean Capital

Finally, Brean Capital’s Eric Tracy reiterated a Buy rating and $110 target price on the stock following the appointment of the new CFO. “We suspect there was no shortage of talent interested in filling the open CFO spot for UA, but finding the right fit was as (if not more) important than the candidate's skill set,” a research note published Wednesday assured.

By hiring Chip Molloy, it seems like the company got “both an experienced and consumer-minded operator with the necessary drive to partner with CEO, Kevin Plank.”

“With recent share retrenchment (off ~20% from highs), this announcement could assuage some of the market fears,” the experts continued. That said, the firm’s biggest concern has/will be continued multiple compression in an environment of rising rates. Consequently, the firm is a more aggressive buyer on pullbacks.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

Latest Ratings for UA

Feb 2020Credit SuisseMaintainsNeutral
May 2019JP MorganUpgradesNeutralOverweight
Feb 2018JP MorganMaintainsNeutralNeutral

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