FBR Capital Upgrades Aeropostale, Inc. (ARO) to Market Perform; Believe the Earnings Risk Is Now Accurately Reflected in the Stock

FBR Capital upgraded Aeropostale, Inc. (NYSE: ARO) to Market Perform. PT $20.

FBR analyst says, "Our thesis of significant comp declines and margin pressure played out in 1Q11 and consensus estimates sufficiently capture the potential for a persistent negative sales and margin trend this year. Changes to the assortment are underway for back to school. We believe Aéropostale is a solid company with good management. We think it is being conservative with guidance. The company generates significant free cash flow and plans to continue buying back stock aggressively. The stock is inexpensive on an EBITDA multiple basis on current numbers. We believe the stock has limited further downside."

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 $18.35 yesterday.

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