Disclosures

American Eagle Outfitters, Inc.

Disclosure

  • B. Riley & Co., LLC does and seeks to do business with companies covered in its research reports.
  • A portion of this analyst’s compensation is based on the sales, trading and investment banking activities of B. Riley & Co., LLC.
  • This report may be distributed by FBR Capital Markets & Co., an affiliate of B. Riley & Co., LLC and as such constitutes third party research. For additional information, please visit http://www.fbr.com/disclosures.
Disclosure Chart

Initiated on 10/22/2008 with a "Buy" rating and a $16.00 Price Target

Ratings Distribution as of June 27, 2017 % with Investment Banking Relationships
Rating Number of Companies Percent of Total
Buy 149 73.8%
Neutral 52 25.7%
Sell 1 0.5%
Total 202 100%
Ratings Distribution as of October 4, 2016 % with Investment Banking Relationships
Rating Number of Companies Percent of Total
Buy 22 95.7%
Neutral 1 4.3%
Sell 0 0.0%
Total 23 100%

Explanation of B. Riley & Co. LLC's Rating System

  • Buy: We generally expect "Buy" rated stocks to materially outperform both the S&P 500 and Russell 2000 as well as other stocks in their sector. Further, we believe that the potential reward relative to the potential risk is particularly attractive.
  • Neutral: We generally believe "Neutral" rated stocks will perform roughly in line with the S&P 500 and Russell 2000 over the intermediate and long term.
  • Sell: We generally expect "Sell" rated stocks to materially underperform both the S&P 500 and Russell 2000 as well as other stocks in their sector. Further, we believe that the potential reward relative to the potential risk is particularly unattractive.

Risks and Considerations

  • Further Potential Risks - See the Company's SEC filings, particularly its 10-K filing, for a discussion of further potential risks.

Additional Risks and Considerations

     

    • General Macroeconmic Risk: There is a considerable macroeconomic headwind at present and retailers such as AEO are experiencing external pressure.
    • General Industry Risk: The company is subject to the inherent volatility of apparel retailing (including potential merchandise content issues) and a possibility exists that the company could miss our estimates, the consensus or its own guidance.
    • Expansion Risk: AEO’s continued growth and success depends in part on opening, operating, and expanding stores in a timely and profitable manner.  
    • Brand Development Risk: New brands such as 77kids, MARTIN & OSA and aerie require careful management, substantial investment, and are subject to risks including customer acceptance, competition, differentiation, and the ability to attract qualified personnel.  
    • Competition: The apparel industry is highly competitive and AEO’s close rivals ARO and ANF are constantly competing for market share.   
    • International Sourcing Strategy: AEO purchases a significant amount of merchandise through a single foreign buying agent and does not maintain exclusive commitments to purchase from any vendor. Any disruption of imports could have a negative effect on operations.
    • Auction Rate Security Risk: Negative conditions in the ARS market could negatively affect AEO’s long-term investment balance.  That said, risk is likely to be temporary and many of the securities held are backed by the U.S. government.