Wunderlich: 'No Momentum' At American Eagle Outfitters

American Eagle Outfitters' AEO holiday sales were slightly higher than expected but an analyst sees "no real momentum" in the company's business.

Wunderlich's Eric Beder maintained a Hold rating and $11 target, saying the stock remains expensive "unless investors are really convinced" the company can beat expectations.

Shares of the teen apparel retailer fell 4.8 percent recently to $13.91.

But given the state of the retail apparel sector "we don't see it happening" Beder said.

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Earlier Thursday, the company boosted its fourth-quarter earnings forecast to between $0.32 and $0.34 a share, from a previous estimate of $0.30 to $0.33 a share, and posted a 2 percent decline in same-store sales.

Given the small change, "we're confused why they even bothered to put out an update" to its earnings estimate, Beder said.

Teen apparel is in a "depression" and although American Eagle may be furthest along in treatment, Beder said the stock is priced at a premium, given its limited growth opportunities.