Morgan Stanley Downgrades American Eagle Outfitters (AEO) to Equalweight

Morgan Stanley analyst Adrienne Yih downgraded American Eagle Outfitters (NYSE: AEO) from Overweight to Equalweight with a price target of $17.00 (from $19.00).

The analyst comments: "When we upgraded AEO shares in August 2023, our thesis was that the American Eagle brand was on a multi-year journey of market share gains due to the head-to-toe silhouette shift to baggier/wider-leg denim bottoms. AEO experienced success on the back of such trends throughout 2H23 and 2024 and generated positive comps with improving margins. As we enter 2025, we now believe that the competitive environment is intensifying in both intimates and apparel. In addition, we believe VSCO is in the early stages of recovery with comps returning to positive in FY3Q24 that could challenge Aerie's comp acceleration, particularly in intimates. As such, we are moving to Equal Weight on AEO shares. Recent price action and a pullback in valuation suggests that the stock already reflects several of these concerns, but we see AEO trading within a range in the near term."

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 $15.78 yesterday.

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