Nomura Securities Maintains a 'Neutral' on American Eagle Outfitters (AEO); 3Q Review and Incremental Info

Nomura Securities maintains a 'Neutral' on American Eagle Outfitters (NYSE: AEO) price target of $13.00.

Nomura analyst, Paul Lejuez, said, "Based on the comments on the conf call yesterday, we believe Nov. comps were in the mid- to high-teens (Black Friday 20%+). This strong start to 4Q was driven by promotions and higher inventory (+30%+/sq ft). Looking to Dec (~55% of 4Q), we are reminded of last year when Black Friday sales were +msd followed by December comps -11%. AEO’s high inventory levels will help keep comps well into positive territory in this year’s 4Q (we model +12%), but also presents gross margin risk (we model GM down ~350bps). We are raising our F11E EPS from $0.85 to $0.93. Trading at ~4x our F12 EBITDA vs. the group at ~6x, the risk/reward seems balanced to slightly favorable."

For an analyst ratings summary and ratings history on American Eagle Outfitters click here. For more ratings news on American Eagle Outfitters click here.

Shares of American Eagle Outfitters closed at $13.91 yesterday.

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