Story updated at 9:55 a.m. to reflect market activity.
Shares of American Eagle Outfitters were gaining 0.6% to $12.34 in morning trading.
The analyst firm raised its price target for the apparel retailer to $14 from $12.
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"While teen space remains challenging, at 6% (5-year average of 10%), operating margins appear close to trough, and with inventories well managed, should continue to inflect into '15," analyst Anna Andreeva wrote. "With 400 leases coming due next four years (40% portfolio) and 178 stores on 1-2 year terms, AEO meaningfully pruning portfolio; expenses well controlled (SG&A dollars flat/down slightly in '15) and should see savings from store closures. AEO hasn't bought back stock in 4 years; with capex coming down to $150M next year (down 35%), we think buyback could be realistic"
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 expanding profit margins 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."