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Analyst: Under Armour CEO's Praise For Trump Hurts The Brand

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Analyst: Under Armour CEO's Praise For Trump Hurts The Brand

Under Armour Inc. (NYSE: UA) (NYSE: UAA) CEO Kevin Plank’s praise of President Donald Trump could be as damaging to the company as Trump modeling one of its form-fitting t-shirts.

Susquehanna downgraded the apparel company from Neutral to Negative on Wednesday, with analyst Sam Poser citing Plank’s recent remarks that Trump is a “pro-business president” and “a real asset for the country,” as well as the difficulty in sustaining 20 percent revenue growth.

"We believe the decision to express a view in today's highly charged political climate was a mistake," Posner said in his report, according to CNBC. "In this case, perception is reality."

Susquehanna lowered its price target to from $24 to $14.

Under Armour shares have dipped 25 percent since the release of a disappointing fourth-quarter earnings report on January 31. The company reported 12 percent revenue growth in the quarter after 26 consecutive quarters of at least 20 percent growth.

CEO Pens Open Letter About Under Armour's Values

After blowback from the remarks that included public criticism from celebrities sponsored by Under Armour, Plank bought a full-page ad in Wednesday's Baltimore Sun that addressed his comments about Trump.

Plank’s comments in the February 7 interview on CNBC “did not accurately reflect my intent,” he said in the open letter published in the Sun.

The CEO said Under Armour supports equal rights, immigration and job creation, and is opposed to Trump’s executive order on immigration.

“We will continue to stand for equality, diversity and opportunity for all,” Plank said.

Golden State Warriors point guard Stephen Curry, actor Dwayne “The Rock” Johnson and ballet dancer Misty Copeland — all of whom are sponsored by Under Armour — were among those who criticized Plank’s comments.

Image Credit: By Ali Shaker/VOA (http://m.voanews.com/a/3430146.html) [Public domain], via Wikimedia Commons

Posted-In: Donald Trump Kevin PlankShort Ideas Downgrades Politics Analyst Ratings Trading Ideas General Best of Benzinga

 

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