UBS Starts Aeropostale, Inc. (ARO) at Neutral; Can ARO Win on Fashion? A Wait and See
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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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UBS initiates coverage on Aeropostale, Inc. (NYSE: ARO) with a Neutral. PT $10.00.
UBS analyst says, "We believe ARO will continue to be a market share donor (at least near-term), given the exceptionally promotional environment which minimizes the pricing gap vs. peers and given merchandise issues, while inventories remain high. While ARO is losing share in its core business based on price, the shift to more fashion carries multiple risks, and may increase volatility of performance longer term. Street expectations are lowered, though we see downside to 4Q11 and 2012 estimates."
"We appreciate the need for strategy adjustments at ARO, given virtual pricing parity with peers, and given no end in sight to the promotional environment. However, with such an overwhelming percentage of ARO’s sales coming from logoed merchandise and camis, this transition is likely to be choppy. We see risk from: the lack of a merchandise visionary since Mindy Meeds’ exit, fashion risk, the ability to chase best-sellers as nimbly as basics, and more complex planning and allocation. American Eagle (NYSE: AEO) faltered in its initial push into fashion due to many of these."
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 $9.31 yesterday.
UBS analyst says, "We believe ARO will continue to be a market share donor (at least near-term), given the exceptionally promotional environment which minimizes the pricing gap vs. peers and given merchandise issues, while inventories remain high. While ARO is losing share in its core business based on price, the shift to more fashion carries multiple risks, and may increase volatility of performance longer term. Street expectations are lowered, though we see downside to 4Q11 and 2012 estimates."
"We appreciate the need for strategy adjustments at ARO, given virtual pricing parity with peers, and given no end in sight to the promotional environment. However, with such an overwhelming percentage of ARO’s sales coming from logoed merchandise and camis, this transition is likely to be choppy. We see risk from: the lack of a merchandise visionary since Mindy Meeds’ exit, fashion risk, the ability to chase best-sellers as nimbly as basics, and more complex planning and allocation. American Eagle (NYSE: AEO) faltered in its initial push into fashion due to many of these."
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 $9.31 yesterday.
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