The rating was bought by the shorts who have an 8% short position. They need bad news before the earnings to position themselves. With the 4 day weekend sales up 13%, shorts are using the old news again today about the dreaded Greek debt and the fiscal cliff which hasn't happened to distract. AEO did good on Black Friday.
I'd have to agree with wubby. BMO is a day late and a couple+ dollars short. The current price, IMO, factors in the impact of Hurricane Sandy (i.e. decrease in east coast sales). If earnings come in light as a result of Sandy, some selling pressure but I'd see that as an entry point. If earning come in at or above expectations then we'll see a pop. Now, with rose colored firmly in place, if they lift 2013 EPS estimates .... well then .... too da moon Edith!!
Current buys are with Zacks, Jefferies, Ford, Smith B., and the Street
Current sells/underperforms are Mkt Edge and EVA.
BMO aside, the technicals were getting ugly (straight down, emerging "mini death cross" with the 50 and 100 day MA) so I sold half my AEO position last Friday. With the estimates being close to the reiterated numbers from the company last month, an upside surprise is possible and hoped for by me. That's why I didn't completely sell. I believe the Sandy effect will be more of a Q4 story. I do agree any sign of a guidance raise for 2013 will cause a big pop but I don't believe there will be one for Q4. Do you think AEO will raise the dividend?
a 26% slashing of the stock price? BMO is a reactionary analyst. Lack of near term catalyst? Am I missing something? AEO report earnings in a week. We also have the biggest shopping day/season starting next week. This guy is an idiot. Things are actually better than expected, AEO reaffirmed their Q3 earnings. The statement should have read, "with NO lack of near term catalysts, and the recent beating the stock has taken we re affirm our price target at $27"