Under Armour's Frequent Executive Changes Is Making Investors Anxious, Says Analyst

BMO Capital Markets analyst Simeon Siegel reiterated an Outperform rating on the shares of Under Armour Inc UA UAA with a price target of $12.00.

Yesterday, Under Armour announced Kevin Plank’s return as CEO, replacing Stephanie Linnartz (CEO since early 2023).

The analyst notes it was a Board-level decision and though they appreciated what Stephanie Linnartz put in place, including hires and efforts in launching UA Rewards, they sought change.

Though the analyst expects Plank is excited to re-enter the role, it is to be recognized that with further C-Suite fluctuation, the burden of proof lies on management execution and results that show this is not repeating the recent past.

Truist Securities analyst Joseph Civello reiterated a Hold rating on the shares of Under Armour with an unchanged price target of $8.00.

Plank founded Under Armour in 1996 and served as its CEO from 1996 until January 2020, when Patrik Frisk took the role, which he held through the end of 2022.

However, after assuming the CEO position in February 2023, Stephanie Linnartz began executing a new turnaround strategy, which included replacing most of the company’s longtime executives.

While the analyst notes the company has been making progress in its turnaround, it would be a long process.

The analyst has been waiting for more concrete signs of brand elevation before getting more bullish.

The slump in the shares following the news likely reflects some investor concerns that the abrupt leadership change may further complicate the company’s ongoing turnaround efforts, opined the analyst.

Also, Williams Trading analyst Sam Poser downgraded Under Armour from Buy to Hold with a $8 price target.

Telsey Advisory Group analyst Joseph Feldman reiterated Under Armour with a Market Perform and maintained $9 price target.

Exane BNP Paribas analyst Laurent Vasilescu downgraded Under Armour from Outperform to Neutral.

Evercore ISI Group analyst Michael Binetti downgraded Under Armour from In-Line to Underperform and lowered the price target from $8 to $7.

Price Action: UAA shares are trading lower by 12.74% at $7.07 on the last check Thursday.

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