American Eagle Outfitters (NYSE:AEO) Shares Gap Down Following Analyst Downgrade

Shares of American Eagle Outfitters, Inc. (NYSE:AEO) gapped down prior to trading on Thursday after UBS Group lowered their price target on the stock from $31.00 to $27.00. The stock had previously closed at $16.89, but opened at $14.69. UBS Group currently has a buy rating on the stock. American Eagle Outfitters shares last traded at $14.6440, with a volume of 5,461,567 shares traded.

A number of other equities research analysts have also weighed in on the stock. Morgan Stanley reiterated an “equal weight” rating and set a $18.00 target price on shares of American Eagle Outfitters in a research note on Monday, July 6th. Citigroup cut their price objective on American Eagle Outfitters from $24.00 to $18.00 and set a “neutral” rating for the company in a report on Monday, June 1st. Wall Street Zen upgraded American Eagle Outfitters from a “hold” rating to a “buy” rating in a research report on Saturday, September 5th. Bank of America reissued an “underperform” rating and issued a $16.00 target price on shares of American Eagle Outfitters in a report on Friday, August 14th. Finally, BMO Capital Markets started coverage on American Eagle Outfitters in a research report on Tuesday. They issued a “market perform” rating and a $18.00 target price on the stock. Two research analysts have rated the stock with a Buy rating, twelve have issued a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat, the company has an average rating of “Hold” and an average price target of $19.64.

Insider Buying and Selling at American Eagle Outfitters

In other American Eagle Outfitters news, Director David Sable sold 5,779 shares of the stock in a transaction that occurred 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 in the company, valued at approximately $921,477.63. This trade represents a 9.75% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, Director Cary D. Mcmillan sold 2,892 shares of American Eagle Outfitters stock in a transaction on Tuesday, July 7th. The stock was sold at an average price of $16.77, for a total transaction of $48,498.84. The SEC filing for this sale provides additional information. Over the last ninety days, insiders sold 11,563 shares of company stock valued at $196,599. Insiders own 8.95% of the company’s stock.

Key Headlines Impacting American Eagle Outfitters

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

• Positive Sentiment: Headline results exceeded expectations: AEO reported adjusted earnings of $0.79 per share versus the approximately $0.22 consensus estimate. Revenue rose 7.5% year over year to $1.38 billion, slightly ahead of forecasts. Operating income more than doubled, supported by revenue growth and improved profitability. American Eagle Outfitters beats quarterly revenue estimates
• Positive Sentiment: Aerie and OFFLINE continued to drive growth: Companywide comparable sales increased 6%, with strong demand for Aerie intimates, sleepwear and apparel helping offset softer performance at the flagship brand. Why did American Eagle’s Q2 operating income more than double?
• Neutral Sentiment: Full-year sales outlook maintained: Management retained its annual sales forecast, indicating that it still expects growth despite cautious consumer spending. However, the unchanged outlook did not provide a fresh catalyst for investors. American Eagle sticks to annual sales forecast amid cautious spending
• Negative Sentiment: Core American Eagle brand remains weak: Comparable sales at the namesake brand declined 1%, while management acknowledged that more work is needed to improve its performance. Inventory also increased year over year, and merchandise margins weakened at the core banner. American Eagle shares slide as flat margin outlook and weak core brand weigh
• Negative Sentiment: Profit quality and margins raised concerns: A substantial portion of the earnings and gross-margin improvement came from tariff refunds, which investors may view as nonrecurring. The company’s quarterly gross-margin forecast was essentially flat, weakening confidence that the earnings improvement is sustainable. American Eagle Outfitters Q2 profit and gross margin inflated by tariff refunds

Institutional Investors Weigh In On American Eagle Outfitters

A number of institutional investors and hedge funds have recently bought and sold shares of AEO. Plato Investment Management Ltd bought a new position in shares of American Eagle Outfitters in the second quarter worth about $25,000. Kemnay Advisory Services Inc. purchased a new position in American Eagle Outfitters in the 4th quarter worth approximately $31,000. Aster Capital Management DIFC Ltd bought a new position in American Eagle Outfitters in the 4th quarter worth approximately $32,000. Raymond James Financial Inc. purchased a new stake in American Eagle Outfitters during the 2nd quarter valued at approximately $35,000. Finally, Allworth Financial LP bought a new stake in shares of American Eagle Outfitters during the second quarter valued at approximately $36,000. 97.33% of the stock is owned by institutional investors.

American Eagle Outfitters Price Performance

The company has a quick ratio of 0.53, a current ratio of 1.55 and a debt-to-equity ratio of 0.05. The firm’s fifty day moving average price is $17.01 and its 200 day moving average price is $17.63. The stock has a market cap of $2.49 billion, a PE ratio of 9.08, a P/E/G ratio of 3.76 and a beta of 1.33.

American Eagle Outfitters (NYSE:AEO) last announced its quarterly earnings results on Wednesday, September 9th. The apparel retailer reported $0.79 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.22 by $0.57. American Eagle Outfitters had a net margin of 5.01% and a return on equity of 20.95%. The company had revenue of $1.38 billion for the quarter, compared to the consensus estimate of $1.37 billion. During the same period in the previous year, the firm posted $0.45 EPS. American Eagle Outfitters’s revenue for the quarter was up 7.5% compared to the same quarter last year. As a group, equities analysts expect that American Eagle Outfitters, Inc. will post 1.76 EPS for the current fiscal year.

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.