CRT Capital Starts Two Retails

American Eagle AEO and The Children's Place PLCE are trading lower Thursday morning following initiations by CRT Capital. Also hurting was a weak retail sales report.

CRT first noted that inconsistent sales and uncertainty regarding the company’s ability to turn around are key concerns. However, because the company is changing gears, which CRT stated, “should eventually lead to improved comps and operating margins over time” was enough to garner a fairly valued rating with an $11 price target. The $11 price target is based on 16 times forward earnings.

Related: Retail Sales Annoucement Sends Stocks Lower' Jobless Claims Miss Estiamtes

The Children’s Place was also started at fairly valued, but has a $52 price target (11.9 percent upside). Despite what CRT calls the “right strategy,” challenges such as “weak mall traffic, inconsistent comp trends, and an elevated promotional environment,” were enough to keep a neutral rating. The $52 price target is based on 15 times forward earnings.