NEW YORK (TheStreet) -- Shares of American Eagle Outfitters Inc. (AEO) are down 4.25% to $12.39 in morning trading after the company was downgraded to "equal weight" from "overweight" at Barclays on Monday.
The firm lowered the price target for the apparel and accessories retailer to $11 from $15.
Barclays said it lowered American Eagle Outfitters' rating because U.S. Retail Softline group changed to Negative outlook from Positive, and AEO is trading at much richer valuation than other specialty retailers, making downside risk heightened.
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"We still believe that AEO is the best positioned teen retailer given its leadership in chase fashion, but industry pressures are difficult to overcome," said Barclays U.S. Retail Softlines analyst Matthew McClintock.
Separately, TheStreet Ratings team rates AMERN EAGLE OUTFITTERS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMERN EAGLE OUTFITTERS INC (AEO) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."