UPDATE: BMO Capital Markets Reiterates Market Perform Rating, Lowers PT on American Eagle Outfitters Following 2Q13 EPS, 3Q13 Outlook

In a report published Thursday, BMO Capital Markets analyst John D. Morris reiterated a Market Perform rating on

, but lowered the price target from $16.00 to $15.00. In the report, BMO Capital Markets noted, “We believe the 3Q outlook, coming off a major miss, is overly cautious, as management looks to fully reset the bar. However, we continue to see the challenges from 2Q bleeding into the back half of the year, as BTS is often a leading indicator for holiday. Further, adjustments to the assortment and marketing will not be immediate, particularly with Executive Creative Director Roger Markfield set to leave his position in early 2014. On the margin side, AEO's heavily promotional stance has eroded pricing credibility. We see a lack of significant margin drivers, as IMU tailwinds subside, sharper price points on core basics limit AUR expansion, and investments in longer-term growth vehicles (DTC, Factory, and international) offset recent SG&A reductions.” American Eagle Outfitters closed on Wednesday at $16.38.