Oppenheimer Issues a Hold Rating on American Eagle

By Ryan Adsit

Oppenheimer analyst Anna Andreeva assigned a Hold rating to American Eagle (NYSE: AEO) today and set a price target of $22. The company’s shares opened today at $22.78, close to its 52-week high of $23.50.

Andreeva wrote:

“Despite unseasonable weather, AEO saw momentum accelerate in 1Q18 (driven by Aerie, where 2-year comp stack improved by 12 points, AEs slowed slightly) with merchandise margins up; with weather improving, so did summer sell-throughs; we think May comps are running above guidance for + MSD on top of easy compare last year. Aerie continues to gain share with 38% comps and with strength broad-based (still in only 15 states); with merchandise margins already close to that of AE, better scale is key for the brand to become accretive to total company EBIT margins. Raising EPS est. and PT (to $22 from $19); AEO is acquisitive on the buyback again, with ~17M shares left on the program (10% of market cap).”

According to TipRanks.com, Andreeva is a 4-star analyst with an average return of 5.7% and a 50.0% success rate. Andreeva covers the Services sector, focusing on stocks such as Lululemon Athletica Inc, Children’s Place, and Urban Outfitters.

Currently, the analyst consensus on American Eagle is Moderate Buy and the average price target is $22, representing a -3.4% downside.

In a report issued on May 21, SunTrust Robinson also downgraded the stock to Hold with a $21 price target.

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Based on American Eagle’s latest earnings release for the quarter ending January 31, the company reported a quarterly net profit of $93.96 million. In comparison, last year the company had a net profit of $25.24 million.

Based on the recent corporate insider activity of 47 insiders, corporate insider sentiment is negative on the stock. Last month, Jennifer Foyle, the Global Brand President-aerie of AEO sold 120,070 shares for a total of $2,532,276.

TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities.

American Eagle Outfitters, Inc. is a multi-brand specialty retailer. It offers an assortment of apparel and accessories for men and women under the American Eagle Outfitters brand, and intimates, apparel and personal care products for women under the Aerie brand.