Jefferies Downgrades American Eagle (AEO)

Jefferies Downgrades American Eagle (AEO)


Jefferies & Co. reported on Wednesday that they have downgraded apparel company, American Eagle Outfitters(AEO) to a “Hold.”

The firm has lowered their rating for AEO from a “Buy” to a “Hold,” and have reduced their price target from $26 to $22. This price target suggests a 6% decline from the stock’s current price of $20.54.

An analyst from the firm noted, “following the appointment of new CEO Robert Hanson roughly a year ago, we believe much of the good news has already played out (e.g. closing the kids business, issuing a special dividend, bringing inventory levels in line with sales),” the analyst comments. “As such we believe much of the good news is already priced into the stock and see further upside as limited.”

American Eagle shares were mostly flat during premarket trading Wednesday. Shares are up 34% over the last year.

The Bottom Line
Shares of American Eagle Outfitters (AEO) have a 2.15% dividend yield, based on Monday’s closing stock price of $20.51. The stock has technical support in the $18 price area. If the shares can firm up, we see overhead resistance around the $22-$23 price levels.

American Eagle Outfitters(AEO) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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