South Side-based American Eagle Outfitters' strong earnings report last week is raising expectations about the company’s stock.
The latest evidence of came in a report
issued Saturday by Janney Montgomery Scott in which the firm maintained
its established buy rating of American Eagle stock and raised its price
target from $19 a share to $20, according to industry reports.
On Tuesday morning after a Memorial Day
weekend, American Eagle’s stock was trading around $16.40 a share, still
below the company’s 52-week high of more than $18.00 after the company’s first-quarter report announced last week achieved 15 cents per share, beating analysts’ estimates.
“So far this earnings season, American Eagle (NYSE: AEO) is one of very few bright spots,” wrote Anna Andreeva, a specialty retail analyst for Oppenheimer & Co.
Oppenheimer maintained an outperform rating for American Eagle while raising its stock price target from $18 a share to $19.
Andreeva described American Eagle’s stock as
an under-appreciated opportunity in a category of largely struggling
teen retailers.
Quoting American Eagle Chief Creative Officer Roger Markfield that the teen sector is in disarray,
Andreeva expects the company to grab sales from closing and
consolidating competitors. She estimated the closures and bankruptcies
of such chains as Delia’s, Wet Seal and Deb Shops has freed up $1
billion in market share that a stronger retailer such as American Eagle
can snare, particularly over still-weak competitor Abercrombie &
Fitch.
Overall, analyst option is still largely
mixed. According to Yahoo Finance, five research firms have upgraded
their rating of American Eagle’s stock in the last nine months versus
three that have downgraded it.
Cr : Pittsburgh Business Times
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