Morgan Stanley analyst Alex Straton raised the firm’s price target on American Eagle to $19 from $16 and keeps an Underweight rating on the shares. The company’s updated long-term strategy and targets “took precedence” over its Q4 beat and above-expectations initial fiscal year guidance, according to the analyst. Long-term sales expectations “appear fair to us,” but the roughly 10% profitability target “could prove optimistic” and the firm fears that both near-term and out-year “negative EPS revision risk looms,” leading to its continued Underweight rating.
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