American Eagle Outfitters (AEO) Bucks Flat Retail Action After Two Bullish Calls

While the retail sector, as represented by the Retail HOLDRs (NYSE: RTH), is flat today, shares of American Eagle Outfitters (NYSE: AEO) are rising 6.5% after receiving two upgrades to Buy.

Both Citigroup and Lazard Capital Markets upgraded shares of the teen retailer today, with price targets of $17 and $22 respectively.

Citigroup said they are encouraged by less negative comps on better product execution, easy sales and margin comparisons, potential positive influence from new Creative Director Roger Markfield, 2H09 product cost savings, and the possible EPS benefit from Martin + Osa. The firm also likes the balance sheet.

Lazard expects margins to improve and said street earnings expectation are overly pessimistic.

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