Goldman Sachs Downgrades American Eagle Outfitters (AEO) to Neutral

Goldman Sachs downgraded American Eagle Outfitters (NYSE: AEO) from Buy to Neutral with a price target of $13.00 (from $16.00).

Analyst Lindsay Drucker Mann said, "Since upgrading to Buy on September 18, shares are -7% vs. the S&P500 at -4%. Our upgrade was based on very strong pricing metrics and favorable markdown activity observed in August. We had expected this momentum would continue through holiday and drive robust upside to consensus metrics. Since then, metrics weakened in September and October, leaving us less optimistic a significant EPS beat is in store. We continue to see upside to consensus estimates as comps stabilize and merchandise margins recover, but the magnitude of upside now appears less material than we had originally expected. AEO’s valuation suggests the market is already pricing in the healthy EPS growth that we anticipate in FY15, and risk reward is overall balanced."

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 $13.80 yesterday.

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