On August 25, 2025, Bank of America Securities downgraded American Eagle Outfitters to 'Underperform' from 'Neutral', with a revised price target of $10 from $11. This downgrade reflects a more cautious outlook on the apparel retailer's near-term prospects.
Analyst Christopher Nardone cited concerns regarding the impact of higher tariffs on product costs and a deceleration in sales momentum, particularly within the company's activewear brand, Aerie. These factors are expected to contribute to a longer path to a normalized earnings profile for American Eagle Outfitters.
The downgrade suggests that the positive momentum generated by recent celebrity marketing campaigns may not be sufficient to offset the underlying challenges posed by the macroeconomic environment and operational headwinds. This analyst action provides a bearish perspective on the company's ability to achieve its earnings targets.
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