KeyBanc Reiterates a 'Buy' on Aeropostale, Inc. (ARO); Adjusting Numbers; Attractive to L-T Investors
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Price: $16.51 --0%
Rating Summary:
10 Buy, 20 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 21 | New: 19
Rating Summary:
10 Buy, 20 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 21 | New: 19
Trade ARO Now!
KeyBanc reiterates a 'Buy' on Aeropostale, Inc. (NYSE: ARO) price target of $21.00 (from $23.00).
Analyst, Edward Yruma, said, "Our November 2011 upgrade was predicated on the prospects of longer-term margin expansion opportunity. Near-term pressures may have changed the timing, but do not change our long-term margin recovery thesis. Aeropostale suffered from a combination of record cotton costs and a highly promotional environment in 2H11, which we thought would both serve as areas for relative improvement in 2H12. While product costs are much more controlled, the promotional environment seems to have intensified even further. ARO reported $0.00 EPS for 2Q12, in line with KBCM and consensus estimates. We are lowering our 2012 EPS estimate from $1.23 to $0.87 on the heels of still lackluster 3Q guidance (mid-point represents a 10% year-over-year decline in EPS)."
At 0.4x 2012 EV/sales compared to 1.1x EV/sales for the specialty retail peer group, the shares remain highly attractive for long-term investors. (FY12 EPS estimate lowered from $1.23 to $0.87 and FY13 from $1.58 to $1.14)
For an analyst ratings summary and ratings history on Aeropostale, Inc. click here. For more ratings news on Aeropostale, Inc. click here.
Shares of Aeropostale, Inc. closed at $13.66 yesterday, with a 52 week range of $9.16-$23.05.
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Analyst, Edward Yruma, said, "Our November 2011 upgrade was predicated on the prospects of longer-term margin expansion opportunity. Near-term pressures may have changed the timing, but do not change our long-term margin recovery thesis. Aeropostale suffered from a combination of record cotton costs and a highly promotional environment in 2H11, which we thought would both serve as areas for relative improvement in 2H12. While product costs are much more controlled, the promotional environment seems to have intensified even further. ARO reported $0.00 EPS for 2Q12, in line with KBCM and consensus estimates. We are lowering our 2012 EPS estimate from $1.23 to $0.87 on the heels of still lackluster 3Q guidance (mid-point represents a 10% year-over-year decline in EPS)."
At 0.4x 2012 EV/sales compared to 1.1x EV/sales for the specialty retail peer group, the shares remain highly attractive for long-term investors. (FY12 EPS estimate lowered from $1.23 to $0.87 and FY13 from $1.58 to $1.14)
For an analyst ratings summary and ratings history on Aeropostale, Inc. click here. For more ratings news on Aeropostale, Inc. click here.
Shares of Aeropostale, Inc. closed at $13.66 yesterday, with a 52 week range of $9.16-$23.05.
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