Aeropostale Downgraded by Goldman Sachs to Sell (ARO)

Aeropostale (NYSE: ARO) was downgraded by equities researchers at Goldman Sachs from a “neutral” rating to a “sell” rating in a report issued on Wednesday, reports. They currently have a $10.00 target price on the stock.

The analysts wrote, “We downgrade ARO to Sell from Neutral with 25% downside to our $10, 6-month price target (vs. 17% average upside for our coverage). A shift in the competitive landscape has left the business facing challenges, and we see downside risk to shares as major turnaround initiatives are implemented. We lower our 2014 EPS to $0.48 from $0.84 to reflect protracted comp pressures, and are 25% below FY13 consensus. We see an asymmetrical path for shares in coming quarters as merchandise changes take hold and the company focuses on its turnaround; we do not believe investors are factoring in the complexity of this endeavor, and think a more cautious stance is appropriate.”

Aeropostale (NYSE: ARO) traded down 2.19% on Wednesday, hitting $12.97. Aeropostale has a 52-week low of $11.76 and a 52-week high of $23.05. The stock’s 50-day moving average is currently $13.47. The company has a market cap of $1.016 billion and a price-to-earnings ratio of 30.84.

Aeropostale (NYSE: ARO) last posted its quarterly earnings results on Thursday, March 14th. The company reported $0.24 earnings per share for the quarter, beating the analysts’ consensus estimate of $0.23 by $0.01. The company had revenue of $797.70 million for the quarter, compared to the consensus estimate of $779.66 million. During the same quarter in the previous year, the company posted $0.44 earnings per share. The company’s revenue for the quarter was down 1.3% on a year-over-year basis. Analysts expect that Aeropostale will post $0.51 EPS for the current fiscal year.

Several other analysts have also recently commented on the stock. Analysts at Barclays Capital initiated coverage on shares of Aeropostale in a research note to investors on Tuesday, April 2nd. They set an “equal weight” rating and a $15.00 price target on the stock. Separately, analysts at Zacks upgraded shares of Aeropostale from an “underperform” rating to a “neutral” rating in a research note to investors on Wednesday, March 20th. They now have a $14.10 price target on the stock. Finally, analysts at Wells Fargo cut their price target on shares of Aeropostale from $13.00 to $12.00 in a research note to investors on Monday, March 18th. They now have a “market perform” rating on the stock.

One investment analyst has rated the stock with a sell rating, thirteen have assigned a hold rating and eight have given a buy rating to the stock. The company presently has a consensus rating of “Hold” and a consensus target price of $15.18.

Aeropostale, Inc., (NYSE: ARO) is a mall-based, specialty retailer of casual apparel and accessories, principally targeting 14 to 17 year-old young women and men through its Aeropostale stores and 4 to 12 year-old kids through its P.

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