FBR Capital Downgrades American Eagle Outfitters (AEO) to Market Perform
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FBR Capital downgraded American Eagle Outfitters (NYSE: AEO) from Outperform to Market Perform with a price target of $19.00 (from $22.00).
Analyst Susan Anderson commented, "We are downgrading AEO to Market Perform from Outperform as AEO is up +17% since we upgraded it on August 26, 2015. We are also lowering our PT to $19 from $22, based on 13x our 2017 EPS estimate, which is unchanged at $1.45. With the recent increase in stock price coupled with recent higher promotions for several weeks of 3Q16, we believe AEO is fairly valued at current levels. AEO trades at 13x FY2 P/E, and at these levels, we believe the risk/reward is fairly balanced with risks from tougher 3Q compares, somewhat higher promos in 3Q, and a continued competitive environment for AE, offset by a easier 4Q compares, consolidation benefits, and growth from aerie/international."
Shares of American Eagle Outfitters closed at $18.36 yesterday.
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