American Eagle Outfitters "outperform," estimates reduced

11/26/07 - RBC Capital Markets

NEW YORK, November 26 (newratings.com) - Analysts at RBC Capital Markets maintain their "outperform" rating on American Eagle Outfitters (AEO), while reducing their estimates for the company. The target price is set to $35.

In a research note published this morning, the analysts mention that the company is likely to post its 3Q EPS at $0.45. Given the sustained rollout of new stores, American Eagle Outfitters’ gross margins are likely to have declined by 40bps, while SG&A is expected to have risen by 30bps, the analysts say. The EPS estimate for 4Q has been reduced from $0.71 to $0.69 to reflect uncertainties in the retail environment. The EPS estimate for 2007 has been reduced from $1.89 to $1.87.