A change of leadership at Under Armor is another blow to investors hoping for a turnaround, according to Morgan Stanley. CEO Patrik Frisk announced on Wednesday that he will resign from 1 June. Shares fell 5% in pre-market trading. Morgan Stanley analyst Kimberly Greenberger responded by downgrading Under Armor to equal weight from obesity, saying that Frisk’s decision “signals a potential lack of confidence” in the company’s recovery plan. “Today’s announcement of the resignation of the CEO, in addition to the pre-Covid performance challenges and last quarter’s miss & FY guide below, is undermining our confidence in the turnaround,” Greenberger wrote. Under Armour’s share has already been lowered in 2022, and the shares have been halved since the beginning of the year. Even with that decline, Under Armor can still be overvalued relative to its peers, Morgan Stanley said. “It is difficult to come up with an argument about revaluation of the valuation from here unless the performance accelerates significantly, which we see as very uncertain against the volatile macro and management turnover,” Greenberger wrote. Morgan Stanley lowered its price target to $ 11 per share from $ 14. The stock closed at $ 10.53 per share on Wednesday. – CNBC’s Michael Bloom contributed to this report.
Morgan Stanley downgrades Under Armour after CEO departure, says confidence in turnaround is waning