Send me real-time posts from this site at my email

Why American Eagle Outfitters Stock Is Higher Today

What happened

Shares of American Eagle Outfitters (NYSE: AEO) were trading higher on Thursday. The company on Tuesday said that it will hit its 2023 financial targets ahead of schedule; Wall Street analysts have since responded with bullish notes, while expressing some near-term concerns.

As of 2 p.m. ET, American Eagle's shares were up about 4.7% from Wednesday's closing price.

So what

In a new note on Thursday, Barclays analyst Adrienne Yih reiterated the bank's overweight rating on American Eagle's shares, while trimming its price target from $46 to $38.

Yih remains bullish on the stock, but she has some near-term concerns. She wrote that fourth-quarter results from other retailers and macro factors including surging cases of the omicron variant of the coronavirus have increased the likelihood of a slower start to 2022 for American Eagle and other apparel retailers, in her view.

Specifically, with respect to American Eagle, Yih thinks that a lack of promotions and clearance sale items could weigh on its January sales and store traffic.

Image source: Getty Images.

Separately but similarly, J.P. Morgan analyst Matthew Boss in a Wednesday note maintained his bank's overweight rating on American Eagle's stock while trimming the bank's price target to $37 from $42.

Clearly, investors in retail stocks were more impressed with the long-term bullishness than with the analysts' near-term concerns on Thursday.

Now what

The company itself was upbeat about its January prospects on Tuesday. It said that for its fiscal fourth quarter, which will end on Jan. 31, it expects revenue to be up from a year ago by a percentage in the "mid-to-high-teens," and up from the fourth quarter of fiscal 2019 by a percentage in the "mid-teens."

It also expects to deliver operating income between $90 million and $100 million for the quarter, despite a sharp increase in transportation costs due to pandemic-related disruptions, it said.

10 stocks we like better than American Eagle Outfitters
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and American Eagle Outfitters wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of January 10, 2022

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. John Rosevear has no position in any of the stocks mentioned. The Motley Fool recommends Barclays. The Motley Fool has a disclosure policy.


Source

Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue