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UPDATE: Goldman Sachs Downgrades Aeropostale to Sell on Challenging Turnaround Path

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In a report published Wednesday, Goldman Sachs analyst Lindsay Drucker Mann downgraded the rating on Aeropostale (NYSE: ARO) from Neutral to Sell, and slightly lowered the price target from $11.00 to $10.00.

In the report, Drucker Mann noted, “We downgrade ARO to Sell from Neutral with 25% downside to our $10, 6-month price target (vs. 17% average upside for our coverage). A shift in the competitive landscape has left the business facing challenges, and we see downside risk to shares as major turnaround initiatives are implemented. We lower our 2014 EPS to $0.48 from $0.84 to reflect protracted comp pressures, and are 25% below FY13 consensus. We see an asymmetrical path for shares in coming quarters as merchandise changes take hold and the company focuses on its turnaround; we do not believe investors are factoring in the complexity of this endeavor, and think a more cautious stance is appropriate.”

Aeropostale closed on Tuesday at $13.26.

Latest Ratings for ARO

DateFirmActionFromTo
Aug 2015Wolfe ResearchInitiates Coverage onPeer Perform
Jul 2015UBSDowngradesNeutralSell
May 2015FBR CapitalMaintainsMarket Perform

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Posted-In: Goldman SachsAnalyst Color Downgrades Analyst Ratings

 

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