Bank of America just raised its EUR/USD forecast
Investing.com - TD Cowen has raised its price target on American Eagle Outfitters (NYSE:AEO) to $13.00 from $11.00 while maintaining a Hold rating, citing sequentially improving sales trends. The retailer, currently valued at $2.28 billion, has shown strong momentum with a 2.55% return over the past week. According to InvestingPro analysis, the stock appears fairly valued at current levels.
The firm noted that a higher inflow of new products has translated to better sales performance at AEO, suggesting that second-quarter 2025 comparable sales growth could reach at least -2% compared to management’s guidance of -3%.
TD Cowen believes the bar for Q2 2025 comparable sales could be as high as -1%, with the firm modeling -1.4% comps, and expects late July and August to benefit from higher brand awareness.
The research firm projects that AEO’s third-quarter 2025 guidance could bracket Street estimates at the low end, as sales trends exceed expectations but gross margins face compression from tariffs, with an estimated incremental tariff impact of approximately $20 million.
TD Cowen currently models Q2 2025 earnings per share of $0.23 versus the Street’s $0.20, and Q3 2025 comparable sales of +0.7% with EPS of $0.45, but cautions that upside could be limited as the stock now trades at approximately 11x earnings and better-than-feared results may already be reflected in the share price.
In other recent news, American Eagle Outfitters has been in the spotlight due to several developments. The company announced a Fall 2025 campaign featuring actress Sydney Sweeney, titled "Sydney Sweeney Has Great Jeans," aiming to reinforce its market position in denim. This campaign initially led to a significant rise in American Eagle’s stock, with shares climbing as much as 25% during premarket trading. However, the campaign also faced backlash, prompting the company to hire external crisis communications specialists from Actum to manage the situation.
In addition, UBS maintained its Buy rating and $19.00 price target for American Eagle, highlighting potential growth from its Aerie brand. UBS anticipates Aerie will contribute to a 10% compound annual growth rate in earnings per share over five years. These developments indicate a mix of challenges and opportunities for American Eagle, as it navigates both positive market reactions and critical feedback.
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