Bank of America Securities analyst Christopher Nardone reiterated a Sell rating on American Eagle today and set a price target of $18.00.
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Christopher Nardone has given his Sell rating due to a combination of factors influencing American Eagle’s current market position. Despite a strong start to the holiday season and an encouraging 4Q comp guidance, the stock’s valuation at nearly 6x EV/EBITDA suggests limited potential for further upside. This valuation concern is a significant factor in reiterating the Underperform rating.
Additionally, while there is positive momentum in segments like Aerie, driven by new customer acquisitions and strong product categories, the sustainability of these trends remains uncertain. The company also faces challenges such as tariff pressures, which are expected to increase costs significantly in the near term. These elements, combined with potential SG&A pressures from higher incentive compensation and marketing spend, contribute to the cautious outlook on American Eagle’s stock performance.
In another report released yesterday, Barclays also maintained a Sell rating on the stock with a $20.00 price target.
Based on the recent corporate insider activity of 42 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AEO in relation to earlier this year.