"AEO is validating our view that it is one of the winners in the battle for teen market share, as it had a solid start to holiday with better traffic than its peers on Black Friday weekend but with less promotional activity," analysts said.
"With improved product and expense and inventory discipline, we believe AEO has further opportunity to improve sales and margins over the next several years. [We] raise our price target based on greater confidence in further improvement in AEO's results," analysts added.
Shares of American Eagle Outfitters are down 13.54% to $11.94 today on heavy trading volume after the clothing retailer guided below analysts' EPS estimates for the fourth quarter.
Separately, TheStreet Ratings team rates AMERICAN EAGLE OUTFITTERS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMERICAN 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 good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. 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."