Wunderlich's Outlook For Aeropostale

In a recent report by Wunderlich Securities, analysts reiterated their Hold rating on Aeropostle Inc ARO and set a $3.50 target for the stock. Despite a generally upbeat 2015 ICR XChange Conference, analysts are not particularly hopeful about the near-term prospects for Aeropostle.
Returning to their roots
CEO Julian Geiger is tasked with steering Aeropostale back on track. Analysts argue that the company has struggled with its identity as of late, and the result has been lackluster performance and a nearly 90 percent drop in share price over the past five years.
Real clothes for real people
According to analysts, Aeropostale has been chasing “fast fashion” trends in recent years, and the results have been disappointing. However, if the company gets back to what has worked in the past, they believe there is still hope for the future. “An emphasis on color, deep assortments and what drives the customer to the store (compelling offerings at solid value, or real clothes for real people) can still be a compelling business model.”
Restructuring in progress
Aeropostale has been closing stores and cutting back on expenses in an effort to streamline operations and reset its business model. One major change has been the elimination of five of the company’s nine sub brands. Analysts are predicting that the major effects from the restructuring process will not start to show up until Back to School season in August, 2015.
Waiting game
Analysts are maintaining their Hold rating on Aeropostale stock until the company demonstrates that it can execute its “back to the basics” plan. In the meantime, it appears that the company will continue to experience negative sales growth and earnings losses.