Market Overview

UPDATE: Nomura Initiates Coverage on Aeropostale on Continued Challenges Ahead

Related ARO
Are Teen Retailers In A 'Structural Decline'? Morgan Stanley Thinks So
Mid-Day Market Update: Markets Open Higher; Coca-Cola Profit Tops Views
Retail Results Lift Consumer Discretionary Earnings To 10.7% (Seeking Alpha)

In a report published Monday, Nomura analyst Simeon Siegel initiated coverage on Aeropostale (NYSE: ARO) with a Neutral rating and $7.00 price target.

In the report, Nomura noted, “Aéropostale, Inc. (ARO) has not posted a positive comp since 1Q12, and we believe the company is facing a greater issue than simply a seasonal product miss. We worry that ARO will continue to have a difficult time adapting to evolving fashion trends and believe the company's lower-income customers will continue to push back on the fashion-focused, more expensive offerings. While we expect some margin improvement in FY14, meaningful margin recapture seems unlikely. Additionally, we do not expect positive FCF generation for at least the next several years based on current estimates. We estimate FY13/FY14 EPS of ($0.57) / ($0.35), compared with the Street at ($0.65) / $(0.06). Our target price of $7 is based on 0.2x EV/Sales off of our FY14 sales estimate of $2.2bn.”

Aeropostale closed on Friday at $8.28.

Latest Ratings for ARO

Dec 2014Morgan StanleyMaintainsUnderweight
Aug 2014JefferiesMaintainsHold
Aug 2014WunderlichInitiates Coverage onHold

View More Analyst Ratings for ARO
View the Latest Analyst Ratings

Posted-In: Nomura Simeon SiegelAnalyst Color Initiation Analyst Ratings


Related Articles (ARO)

Around the Web, We're Loving...

Get Benzinga's Newsletters

Our Experts vs. S&P 500Powered by Benzinga
Marketfy Products Return S&P 500
Morning Profit Maker 42.72% 6.69%
The Option Prophet 91.14% 6.69%
SecretCaps 26.55% 6.69%
Short-Term Trend Trading 11.89% 6.69%
View the highest rated products→