Wells Fargo Raises Price Valuation Range on Aeropostale (ARO) Following New Guidance
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Price: $0.15 --0%
Rating Summary:
5 Buy, 25 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 18 | New: 20
Rating Summary:
5 Buy, 25 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 18 | New: 20
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Wells Fargo is reaffirming its Underperform rating on shares of Aeropostale, Inc. (NYSE: ARO), but is increasing its valuation range from $10-$11 to $14-$15.
The company reported Q3 comps roughly inline with what the Street was expecting and raised its Q3 guidance from $0.09-0.15 to $0.27-0.28 due to stronger than expected gross margins.
Given the company's new outlook and Q3 comps report, the firm is now forecasting gross margins will only be down 9.8 percent for Q3, up from its previous estimate of being down 13.2 percent. Wells Fargo continues to forecast a 14.8 percent decrease in gross margins for Q4. For the full year 2011, the firm is raising its EPS estimate from $0.80 to $0.95.
For 2012, the firm believes comps will decline 2 percent, but gross and operating margins will increase 1.1 percent due to lower cotton prices and markdowns. Wells Fargo is also raising its 2012 EPS estimate from $0.90 to $1.18.
An analyst at Wells Fargo comments, "We maintain our Underperform rating given earnings results are very volatile and comps are still down significantly, trailing peers. We continue to think that the merchandising issues will take a long time to resolve."
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 $17.25 yesterday.
The company reported Q3 comps roughly inline with what the Street was expecting and raised its Q3 guidance from $0.09-0.15 to $0.27-0.28 due to stronger than expected gross margins.
Given the company's new outlook and Q3 comps report, the firm is now forecasting gross margins will only be down 9.8 percent for Q3, up from its previous estimate of being down 13.2 percent. Wells Fargo continues to forecast a 14.8 percent decrease in gross margins for Q4. For the full year 2011, the firm is raising its EPS estimate from $0.80 to $0.95.
For 2012, the firm believes comps will decline 2 percent, but gross and operating margins will increase 1.1 percent due to lower cotton prices and markdowns. Wells Fargo is also raising its 2012 EPS estimate from $0.90 to $1.18.
An analyst at Wells Fargo comments, "We maintain our Underperform rating given earnings results are very volatile and comps are still down significantly, trailing peers. We continue to think that the merchandising issues will take a long time to resolve."
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 $17.25 yesterday.
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