09:25 AM EDT, 05/30/2024 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We maintain our 12-month price target of $20, based on 12.5x our FY 25 (Jan.) EPS estimate and slightly higher than the company's three-year average forward P/E multiple of 12.1x. We maintain our FY 25 and FY 26 EPS estimates of $1.60 and $1.75, respectively. AEO posted normalized Q1 EPS of $0.34 vs. $0.17, $0.06 above consensus estimates on revenues of $1.14B vs. $1.08B and $8M below estimates. By brand in Q1, Aerie revenues increased 4% Y/Y and American Eagle revenues increased 8%. Q1 gross margin expanded 240 bps Y/Y to 40.6% due to strong inventory management, a shift to a more profitable clearance strategy, and lower product and transportation costs. Inventory increased 9% Y/Y to $681M with units up 10%. Management maintained its full-year operating income guidance of $455M at the midpoint. We continue to believe growth at Aerie is slowing and the company continues to underperform peers in many operating metrics. We remain bearish on shares trading above 14x our FY 25 EPS estimate.