Janney Capital Downgrades American Eagle Outfitters (AEO), Chico's FAS (CHS) to Neutral; Sector Cut to Underweight
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Price: $22.94 +1.37%
Rating Summary:
15 Buy, 17 Hold, 3 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
15 Buy, 17 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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Janney Capital analyst Adrienne Tennant downgraded American Eagle Outfitters (NYSE: AEO) from Buy to Neutral with a price target of $16.00 (from $23.00) following yesterday's earnings warning. The firm is lowering 2Q13 EPS estimate to $0.10 from $0.21 (versus consensus of $0.21). FY13 and FY14 EPS estimates go to $1.07 from $1.44 (versus consensus of $1.44) and to $1.23 from $1.64 (versus consensus of $1.65), respectively.
Tennant is also downgrading the softlines sector to Underweight from Neutralweight, as they perceive headwinds for the sector for the fall season, including: 1) sector-wide inventory dollar build, 2) neutral impact of cost deflation, 3) lack of incremental newness in fashion, 4) ongoing highly promotional environment that continues to be deeper than LY based on their analysis, and 5) reversal of the 53rd week shift benefit for 3Q13 and 4Q13.
Chico's FAS, Inc. (NYSE: CHS) was also downgraded from Buy to Neutral as they believe the sector may face multiple contraction, and we believe a still-weak consumer environment limits EPS upside for the remainder of the year. The firm is maintaining 2Q13 EPS estimate of $0.29 (versus consensus of $0.33). They are lowering our FY13 and FY14 EPS estimates to $1.10 from $1.13 (versus consensus of $1.16) and to $1.26 from $1.31 (versus consensus of $1.34), respectively. The price target goes down from $22 to $19.
Based on our YTD promotional checks, Urban Outfitters (NASDAQ: URBN) is the one name that appears to have been able to sell product at full-price, particularly at the Anthropologie division. As a result, despite our Underweight sector rating, we continue to recommend shares of URBN, as well as beta/speculative plays Bebe Stores (NASDAQ: BEBE) and Pacific Sunwear of California (NASDAQ: PSUN).
The firm lowered Q2 estimates on Aeropostale, Inc. (ARO) (Neutral) to ($0.19) from ($0.15) (versus consensus of ($0.16)). As a result, they are also are lowering our FY13 and FY14 EPS estimates to $0.31 from $0.39 (versus consensus of $0.36) and to $0.56 from $0.65 (versus consensus of $0.63), respectively.
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 $19.97 yesterday.
Tennant is also downgrading the softlines sector to Underweight from Neutralweight, as they perceive headwinds for the sector for the fall season, including: 1) sector-wide inventory dollar build, 2) neutral impact of cost deflation, 3) lack of incremental newness in fashion, 4) ongoing highly promotional environment that continues to be deeper than LY based on their analysis, and 5) reversal of the 53rd week shift benefit for 3Q13 and 4Q13.
Chico's FAS, Inc. (NYSE: CHS) was also downgraded from Buy to Neutral as they believe the sector may face multiple contraction, and we believe a still-weak consumer environment limits EPS upside for the remainder of the year. The firm is maintaining 2Q13 EPS estimate of $0.29 (versus consensus of $0.33). They are lowering our FY13 and FY14 EPS estimates to $1.10 from $1.13 (versus consensus of $1.16) and to $1.26 from $1.31 (versus consensus of $1.34), respectively. The price target goes down from $22 to $19.
Based on our YTD promotional checks, Urban Outfitters (NASDAQ: URBN) is the one name that appears to have been able to sell product at full-price, particularly at the Anthropologie division. As a result, despite our Underweight sector rating, we continue to recommend shares of URBN, as well as beta/speculative plays Bebe Stores (NASDAQ: BEBE) and Pacific Sunwear of California (NASDAQ: PSUN).
The firm lowered Q2 estimates on Aeropostale, Inc. (ARO) (Neutral) to ($0.19) from ($0.15) (versus consensus of ($0.16)). As a result, they are also are lowering our FY13 and FY14 EPS estimates to $0.31 from $0.39 (versus consensus of $0.36) and to $0.56 from $0.65 (versus consensus of $0.63), respectively.
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 $19.97 yesterday.
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