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Fly News Breaks for February 18, 2020
Feb 18, 2020 | 06:17 EDT
Cowen analyst Oliver Chen downgraded American Eagle (AEO) to Market Perform from Outperform with a price target of $14, down from $15. The analyst sees downside risk to the company's sales, traffic, and promotions. American Eagle's apparel assortment is now a work in progress given execution issues in tops, Chen tells investors in a research note. Further, the analyst believes traffic pressure at lower productivity stores may be a risk given Macy's (M) closures and American Eagle's "relatively saturated" 945 store base. Chen says that while tariff risk has waned, he's concerned around American Eagle's ability to drive sustainable traffic without sacrificing merchandise margin, especially in the face of tops' underperformance and general mall traffic headwinds.
News For AEO From the Last 2 Days
Aug 13, 2020 | 10:15 EDT
Bearish flow noted in American Eagle with 5,413 puts trading, or 15x expected. Most active are Aug-20 11 puts and Sep-20 13 calls, with total volume in those strikes near 5,500 contracts. The Put/Call Ratio is 8.84, while ATM IV is up over 55 points on the day. Earnings are expected on September 2nd.
Aug 12, 2020 | 10:11 EDT
Catch up on today's top five analyst upgrades with this list compiled by The Fly: 1. Home Depot (HD) upgraded to Accumulate from Hold at Gordon Haskett with analyst Chuck Grom saying based on macro data and his checks, he has raised his Q2 same-store sales estimates for the chain, taking his forecast for Home Depot to 12.0% from 4.5%, noting that these are ahead of the consensus SSS growth forecast of 8.9%, respectively. 2. AutoNation (AN) upgraded to Buy from Neutral at Guggenheim with analyst Ali Faghri saying the he sees room for shares to re-rate higher due to the company's ability to extract value from omni-channel and its investments in Vroom and Waymo as well as potential earnings upside from capital deployment. 3. American Eagle (AEO) upgraded to Overweight from Neutral at JPMorgan with analyst Matthew Boss saying he views the shares as "mis-priced" with the stock down 45% in the past 18 months. 4. Epam Systems (EPAM) upgraded to Overweight from Equal Weight at Morgan Stanley with analyst James Faucette saying demand for Epam's digital services remains resilient, driving upside to estimates in Q2. 5. j2 Global (JCOM) upgraded to Outperform from Sector Perform at RBC Capital with analyst Shweta Khajuria citing the company's "attractive valuation" of 6.7-times expected 2022 EBITDA, stable-to-improving trends, and the decision related to board refresh and stock buybacks. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
Aug 12, 2020 | 09:02 EDT
As previously reported, JPMorgan analyst Matthew Boss upgraded American Eagle to Overweight from Neutral with a $17 price target, stating that he views the shares as "mis-priced" with the stock down 45% in the past 18 months. He sees the casual and athletic tailwinds for the company's Aerie brand "more than offsetting" the negative near-term transitory Back-to-School disruption, adding that he also views American Eagle brand store closures as a positive catalyst. Given Aerie's growth, Boss sees the current valuation implying "zero value" ascribed to the American Eagle brand despite its $3B+ revenue base and number one denim market share for 15-25 year old men and women.
Aug 12, 2020 | 08:02 EDT
Jefferies analyst Janine Stichter says American Eagle's (AEO) Aerie division has the potential to reach $3B in revenue over the next five years, triple the current revenue base. While Aerie had strong momentum pre-COVID, Stichter sees potential for a more rapid pace of growth from here, including unit growth of mid-teens, double digit percentage comp growth and share gains from legacy and intimates and apparel players, especially Victoria's Secret and Pink (LB). The analyst made no change to her Buy rating or $20 price target for American Eagle.