American Eagle Outfitters (AEO) Stock: Why Its Trending Today

By Amit Chowdhry ● Jul 26, 2022
  • The American Eagle Outfitters (AEO) stock is trending today. This is why.

The American Eagle Outfitters (AEO) stock is trending today as it fell over 7% during intraday trading. Investors are responding negatively to a bearish research report.

BofA Securities analyst David Buckley downgraded the company shares from a “Neutral” rating to an “Underperform” rating. And Buckley reduced the price target from $13 to $8.

“2H turnaround could prove to be too optimistic Following disappointing 1Q results (see report), management cut its overall EBIT outlook to > ’19 levels (or >$314 million vs $550-600 million previously) but reiterated expectations for Aerie’s business to double this year vs ’19 levels (implies 16% y/y growth or +26% 3yr CAGR),” wrote Buckley in a research note. “We see risk of management missing numbers again given waning demand from inflation and a continued shift from athleisure into occasion wear (Aerie is underexposed to the latter category). Decelerating BAC aggregated debit/credit card spending data in the teen clothing category (-14%/-15% y/y in May/June compared to -9% in April) supports our view. Our updated forecasts imply F22/F23 EBIT of $270 million/$300 million.”

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.