Morgan Stanley Cuts American Eagle Outfitters (NYSE:AEO) Price Target to $17.00

Key Points

• Morgan Stanley lowered American Eagle Outfitters’ price target from $18 to $17 while maintaining an “equal weight” rating. The new target implies approximately 19.5% upside from the stock’s reported $14.22 price.
• AEO shares fell 15.8% to $14.22, despite the company reporting quarterly EPS of $0.79 versus the $0.22 consensus estimate and revenue up 7.5% year over year to $1.38 billion.
• Investor concerns center on weakness in the core American Eagle brand, flat projected gross margins and an unchanged annual comparable-sales outlook. Analysts collectively rate the stock “Hold,” with a consensus price target of $19.55.

American Eagle Outfitters (NYSE:AEO - Get Free Report) had its target price decreased by analysts at Morgan Stanley from $18.00 to $17.00 in a note issued to investors on Thursday, Benzinga reports. The firm presently has an "equal weight" rating on the apparel retailer's stock. Morgan Stanley's price target would indicate a potential upside of 19.52% from the stock's current price.

AEO has been the topic of several other reports. Barclays cut their target price on shares of American Eagle Outfitters from $19.00 to $17.00 and set an "equal weight" rating on the stock in a research note on Friday, May 29th. The Goldman Sachs Group set a $22.00 price target on American Eagle Outfitters in a report on Monday, June 1st. Wall Street Zen raised American Eagle Outfitters from a "hold" rating to a "buy" rating in a research report on Saturday, September 5th. TD Cowen reduced their price objective on American Eagle Outfitters from $19.00 to $18.00 and set a "hold" rating for the company in a research note on Monday, May 18th. Finally, JPMorgan Chase & Co. lifted their target price on American Eagle Outfitters from $19.00 to $21.00 and gave the company a "neutral" rating in a research note on Tuesday, August 18th. Two equities research analysts have rated the stock with a Buy rating, twelve have given a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the company has an average rating of "Hold" and a consensus target price of $19.55.

American Eagle Outfitters Trading Down 15.8%

Shares of NYSE AEO traded down $2.67 during mid-day trading on Thursday, hitting $14.22. 15,760,726 shares of the company traded hands, compared to its average volume of 5,455,635. The company has a quick ratio of 0.53, a current ratio of 1.55 and a debt-to-equity ratio of 0.05. American Eagle Outfitters has a 1 year low of $14.06 and a 1 year high of $28.46. The stock has a market capitalization of $2.38 billion, a price-to-earnings ratio of 8.77, a PEG ratio of 3.76 and a beta of 1.33. The business has a 50 day moving average of $17.01 and a two-hundred day moving average of $17.63.

American Eagle Outfitters (NYSE:AEO - Get Free Report) last posted its quarterly earnings data on Wednesday, September 9th. The apparel retailer reported $0.79 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.22 by $0.57. American Eagle Outfitters had a return on equity of 20.95% and a net margin of 5.01%.The firm had revenue of $1.38 billion for the quarter, compared to the consensus estimate of $1.37 billion. During the same quarter in the previous year, the company earned $0.45 EPS. The business's revenue for the quarter was up 7.5% compared to the same quarter last year. On average, sell-side analysts anticipate that American Eagle Outfitters will post 1.76 earnings per share for the current fiscal year.

Insider Transactions at American Eagle Outfitters

In other news, Director David Sable sold 5,779 shares of the company's stock in a transaction on Friday, July 17th. The shares were sold at an average price of $17.23, for a total value of $99,572.17. Following the transaction, the director directly owned 53,481 shares of the company's stock, valued at approximately $921,477.63. This represents a 9.75% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, Director Cary D. Mcmillan sold 2,892 shares of the stock in a transaction on Tuesday, July 7th. The stock was sold at an average price of $16.77, for a total value of $48,498.84. The SEC filing for this sale provides additional information. Over the last ninety days, insiders have sold 11,563 shares of company stock valued at $196,599. 8.95% of the stock is owned by insiders.

Institutional Investors Weigh In On American Eagle Outfitters

Several large investors have recently made changes to their positions in AEO. Royal Bank of Canada lifted its stake in American Eagle Outfitters by 24.8% in the first quarter. Royal Bank of Canada now owns 162,243 shares of the apparel retailer's stock valued at $1,885,000 after acquiring an additional 32,191 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its holdings in shares of American Eagle Outfitters by 4.5% during the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 105,726 shares of the apparel retailer's stock valued at $1,229,000 after purchasing an additional 4,599 shares in the last quarter. Jones Financial Companies Lllp lifted its stake in shares of American Eagle Outfitters by 1,238.2% in the 1st quarter. Jones Financial Companies Lllp now owns 52,551 shares of the apparel retailer's stock valued at $611,000 after purchasing an additional 48,624 shares during the last quarter. Empowered Funds LLC boosted its holdings in American Eagle Outfitters by 9.6% in the first quarter. Empowered Funds LLC now owns 15,937 shares of the apparel retailer's stock worth $185,000 after purchasing an additional 1,398 shares in the last quarter. Finally, Marshall Wace LLP increased its position in American Eagle Outfitters by 349.9% during the second quarter. Marshall Wace LLP now owns 538,681 shares of the apparel retailer's stock worth $5,182,000 after buying an additional 418,943 shares during the last quarter. Institutional investors own 97.33% of the company's stock.

American Eagle Outfitters News Roundup

Here are the key news stories impacting American Eagle Outfitters this week:

• Positive Sentiment: American Eagle reported second-quarter earnings of $0.79 per share, well above the roughly $0.22 consensus estimate, while revenue increased 7.5% year over year to approximately $1.38 billion, slightly exceeding expectations. American Eagle Outfitters beats quarterly revenue estimates
• Positive Sentiment: Growth was supported by strong demand at Aerie, particularly in intimates, sleepwear and apparel, as well as momentum at the OFFLINE brand. Total comparable sales reportedly rose 6%. American Eagle shares slide as flat margin outlook and weak core brand weigh
• Positive Sentiment: UBS maintained a Buy rating despite reducing its price target to $27 from $31, indicating that some analysts still see substantial long-term upside. Analyst price target update
• Neutral Sentiment: Second-quarter operating income more than doubled, but a significant portion of the improvement came from a $161 million tariff refund. Investors are questioning how much of the earnings growth is recurring. American Eagle profit and gross margin inflated by tariff refunds
• Negative Sentiment: Comparable sales at the core American Eagle brand declined 1% and fell short of expectations, highlighting continued weakness among cautious U.S. consumers despite strength at Aerie. American Eagle stock slumps on weakness at namesake brand
• Negative Sentiment: The company left its annual same-store-sales forecast unchanged and projected flat gross margins for the third quarter. The lack of an outlook upgrade disappointed investors after the earnings beat. American Eagle falls on dismal forecast
• Negative Sentiment: Analysts also trimmed price targets, including Telsey Advisory Group to $18 from $20, reflecting concerns about brand-level demand and margin durability. Analyst price target update

American Eagle Outfitters Company Profile

American Eagle Outfitters, Inc NYSE: AEO is a leading American specialty retailer offering apparel, accessories and personal care products for men and women. The company's flagship brand, American Eagle, focuses on casualwear including denim, tops, outerwear and accessories targeted primarily at teens and young adults. In addition to its core apparel lines, the company operates the Aerie brand of intimates, loungewear and swimwear, which has gained recognition for its body-positive marketing and inclusive sizing.

American Eagle Outfitters conducts business through a combination of over 900 brick-and-mortar stores in North America and Greater China, complemented by a growing e-commerce platform that serves customers around the globe.

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