KeyBanc Upgrades Aeropostale, Inc. (ARO) to Hold; Too Cheap To Overlook
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Price: $0.15 --0%
Rating Summary:
5 Buy, 25 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
5 Buy, 25 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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KeyBanc upgraded Aeropostale, Inc. (NYSE: ARO) from Underweight to Hold.
KeyBanc analyst says, "We downgraded Aeropostale to UNDERWEIGHT from HOLD on November 1, 2010. Our thesis was predicated on what we viewed as ARO's unsustainably high margins. Since our downgrade, ARO's 2011 EPS consensus estimates have fallen from $2.81 to $2.32. Moreover, the Company has materially underperformed relative to the BUY-rated Buckle (NYSE: BKE)(-NYSE; other element of the pair trade), and retail more generally (since our downgrade, BKE is up 38% and the RLX is up 13%, while ARO is up only a mere 4%). We think the Company should attain at least the low end of its 2011 guidance, and aggressive share repurchases provide room for error. As such, at 10.4x our 2011 P/E (compared to peer average of 15.3x), we believe ARO is too inexpensive to maintain an UNDERWEIGHT rating."
For more ratings news on Aeropostale, Inc. click here and for the rating history of Aeropostale, Inc. click here.
Shares of Aeropostale, Inc. closed at $25.03 yesterday.
KeyBanc analyst says, "We downgraded Aeropostale to UNDERWEIGHT from HOLD on November 1, 2010. Our thesis was predicated on what we viewed as ARO's unsustainably high margins. Since our downgrade, ARO's 2011 EPS consensus estimates have fallen from $2.81 to $2.32. Moreover, the Company has materially underperformed relative to the BUY-rated Buckle (NYSE: BKE)(-NYSE; other element of the pair trade), and retail more generally (since our downgrade, BKE is up 38% and the RLX is up 13%, while ARO is up only a mere 4%). We think the Company should attain at least the low end of its 2011 guidance, and aggressive share repurchases provide room for error. As such, at 10.4x our 2011 P/E (compared to peer average of 15.3x), we believe ARO is too inexpensive to maintain an UNDERWEIGHT rating."
For more ratings news on Aeropostale, Inc. click here and for the rating history of Aeropostale, Inc. click here.
Shares of Aeropostale, Inc. closed at $25.03 yesterday.
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