Retailers Stand to Benefit from Shoe Carnival's Stumble

With the most popular shopping season of the year on the horizon, analysts' opinions of retailers have been fluctuating at an alarming rate. Unfortunately for popular stocks such as Shoe Carnival (NASDAQ: SCVL), now is not the best time to be wrapping a red bow around shares to place under the tree. The company was downgraded Friday morning from Buy to Neutral at Sterne Agee as quarterly results met, but did not exceed, expectations.Sam Poser of Sterne Agee made it known that he would not put new money on Shoe Carnival at this time – but it's not because the company is doing poorly. In fact, Poser finds the retailer to be very secure with a management team that accomplishes the goals it sets."Downgrading to Neutral from Buy as results and outlook were in line with our expectations: We believe SCVL is a very good company with a solid management team that is executing properly. However, the results and outlook met our expectations but did not exceed them. The stock has already passed our prior PT of $23, and given no new catalysts we see no reason to put new money to work," Poser wrote in the report. Analyst praise regarding the "very good company" is just one of the many reasons why shareholders have found Shoe Carnival attractive in the past. While the company has consistently been a safe bet throughout 2012, it is the philanthropic work and events that keeps Shoe Carnival under a favorable light.Those who stand to gain from the do-gooder's downgrade range from direct competitors Foot Locker (NYSE: FL) and DSW (NYSE: DSW), to rebounding clothing distributors Urban Outfitters (NASDAQ: URBN) and American Eagle Outfitters (NYSE: AEO). American Eagle Outfitters was upgraded at Bank of America on Friday morning from Sell to Neutral, as competitive pressures have calmed and the company's second quarter was in-line with estimates. EPS of $0.21 impressed the research firm, as new managerial strategies helped to generate initially attractive back-to-school results.Similarly, Urban Outfitters has experienced a surge in success following a fairly tumultuous year. The company beat estimates in its second-quarter earnings report, prompting many analysts to raise their price targets on the once floundering company. As the tables continue to turn on 2012's retail successes and failures, merchants of all shapes and sizes are positioned to benefit from Shoe Carnival's Friday morning downgrade. Poser noted in his report that Sterne Agee will not become more constructive on the stock until the economy improves and store openings accelerate. Whether or not shareholders agree with him remains to be seen. Shares of Shoe Carnival are up nearly 41.7 percent year-to-date but down 1.68 percent pre-market Friday morning.