You are here
Under Armour CEO hammered by analyst for praising Donald Trump
[NEW YORK] Under Armour Inc's chief executive officer made a mistake praising President Donald Trump, and the move could take a toll on the company's reputation and stock price, according to a Susquehanna International Group analyst.
CEO Kevin Plank's recent comment that Mr Trump was a "real asset" to the country drew rebukes from Under Armour's own spokespeople, including NBA star Steph Curry. The controversy, along with broader concerns about Under Armour's valuation and slowing growth, led Susquehanna's Sam Poser to downgrade the stock to negative from neutral.
Mr Plank's pro-Trump commentary makes it "nearly impossible to effectively build a cool urban lifestyle brand in the foreseeable future," Mr Poser said in a report. He also cut his stock-price target to US$14 from US$24, putting him at the low end of Wall Street peers.
"At this point we don't believe Under Armour is in danger of losing Steph Curry," Mr 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."
Shares of Baltimore-based Under Armour fell as much as 2.6 per cent to US$18.90 in early trading. The stock has lost 23 per cent of its value this year through Tuesday's close.
In responding to Mr Plank's remark about Mr Trump, Curry said he agreed with the description "if you remove the 'et'" from asset.