Shares of Under Armour (UA, UAA) are falling after a Susquehanna analyst downgraded the stock to Negative citing the company's weakening brand. Given "poor" brand distribution decisions, the analyst said Under Armour risks are becoming more like Reebok than Nike (NKE).

SUSQUEHANNA NEGATIVE: Susquehanna analyst Sam Poser downgraded Under Armour to Negative from Neutral. In a note to clients, Poser said the fundamental outlook has not improved since its weak print back in October, despite the 30%+ rally in the last eight weeks, and he believes the company's brand will continue to weaken before it is clear if it can survive. Given the poor brand management and its uncertain future, there is no reason for the shares to trade at its historic multiple, said, Poser. The analyst, who believes fair value is $11 on Under Armour shares, said Under Armour risks are "becoming more like Reebok than Nike." He added that improved sentiment based on claims the company can restore demand growth in North America and expand EBITDA margins are "off base".

BUCKINGHAM NEUTRAL: On January 5, Buckingham analyst Eric Tracy assumed coverage of Under Armour with a Neutral rating and $17 price target, acknowledging that domestic headwinds should persist over the near-term but also noting that investor expectations are now very low.

INVESTOR CONCERNS: While 2017 was a tough year for Under Armour, its CEO Kevin Plank's private investment firm, Plank Industries, "was on a roll," the Wall Street Journal reported on December 25. The athletic-gear company posted two consecutive quarters of net losses, including its first-ever quarterly sales decline, cut nearly 300 jobs and lost top management in 2017 raising investor concerns over Plank's multitasking, analysts told WSJ. In an interview, however, Plank said there is no link between activity at Plank Industries and Under Armour's troubles adding he's focused on turning Under Armour around. "My job is running Under Armour, period," he said.

PRICE ACTION: Class A shares of Under Armour fell 4.6% to $15.26 in morning trading.