American Eagle Outfitters stock price target raised by CFRA to $19

Investing.com - CFRA has raised its price target on American Eagle Outfitters (NYSE:AEO) to $19.00 from $10.00 while maintaining a Hold rating on the stock. According to InvestingPro data, the company maintains a "GOOD" overall financial health score and offers a notable 3.67% dividend yield.

The significant price target increase follows American Eagle’s second-quarter earnings report, where the company posted normalized earnings per share of $0.45, exceeding consensus estimates by $0.25. The retailer reported revenues of $1.28 billion, surpassing estimates by $48 million. The company has demonstrated strong financial stability with a healthy current ratio of 1.62 and has maintained dividend payments for 22 consecutive years.

Performance varied across the company’s brands during the quarter, with Aerie comparable sales increasing 3% year-over-year, while the American Eagle namesake brand saw a 3% decline. Gross margin expanded 30 basis points compared to the same period last year due to an improved promotional environment.

American Eagle management has raised its full-year guidance, now expecting flat comparable sales and operating income of $260 million at the midpoint. The company attributed the strong start to its fall season to successful marketing campaigns featuring Sydney Sweeney and Travis Kelce.

CFRA’s decision to maintain a Hold rating comes despite the stock’s 90% rally from its 52-week low, with the analyst citing valuation concerns as the shares trade at 15 times next 12-month earnings estimates. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value, suggesting caution may be warranted at current levels.

In other recent news, American Eagle Outfitters reported impressive financial results for the second quarter of 2025. The company achieved earnings per share of $0.45, significantly outperforming the anticipated $0.20. Additionally, American Eagle Outfitters reported a revenue of $1.28 billion, surpassing the expected $1.23 billion. Barclays has responded to these results by raising its price target for American Eagle Outfitters to $14 from $9, while maintaining an Underweight rating. The firm highlighted the company’s gross margin expansion and increased traffic as reasons for the target adjustment. UBS also increased its price target for the company, raising it to $21.50 from $19, and maintained a Buy rating. UBS attributed this change to growth in the Aerie brand, suggesting a potential 58% upside from the current stock price. These recent developments indicate a positive outlook from analysts on American Eagle Outfitters’ performance.

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