UPDATE: Oppenheimer Downgrades American Eagle Outfitters on Disappointing Results
In a report published Thursday, Oppenheimer analyst Anna Andreeva downgraded the rating on American Eagle Outfitters (NYSE: AEO) from Outperform to Perform, but reiterated the $19.00 price target.
In the report, Oppenheimer noted, “We believe AEO's management team did all the right things both from a product and capital/inventory management perspective last year, which could prove to be a tough act to follow in 2013, especially as comparisons remain difficult all year long (the two-year stack gets more difficult in 2H13, the opposite of most retailers). While valuation is inexpensive with the stock trading at 14x and 12x our 2013 and 2014 EPS estimates, respectively (5.6x and 5.3x our 2013/2014E EV/EBITDA), in the absence of comps accelerating and upside to sell-side estimates, we expect the stock to be range-bound in the near term. We are also hard-pressed to argue for multiple expansion for 3%-4% EPS growth embedded in AEO's 2013 guidance. Sixty percent of sell side ratings are Outperform, and short interest levels are at historical lows (3.8% of the float versus the group at 8%), although the stock has lagged (down 7% YTD versus our group up 11%).”
American Eagle Outfitters closed on Wednesday at $18.72.
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|May 2015||CRT Capital||Maintains||Fairly Valued|
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