09:25 AM EST, 03/07/2024 (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 raise our 12-month target by $2 to $20, based on 12.5x our FY 2025 (Jan.) EPS estimate and in line with the company's three-year average forward P/E multiple of 12.4x. We raise our FY 2025 EPS estimate by $0.25 to $1.60 and initiate FY 2026's at $1.75. AEO posted normalized Q4 EPS of $0.61 vs. $0.37, $0.11 above consensus estimates on revenues of $1.68B vs. $1.50B and $11M above estimates. By brand, Aerie comparable store sales increased 13% Y/Y while American Eagle comparable store sales increased 6%. Q4 adjusted gross margin expanded 340 bps Y/Y to 37.3% due to lower input and freight costs and lower markdowns. Inventory increased 9% Y/Y with units up 11%, which the company believes is healthy and will help fuel its growth expectations. The company announced a three-year plan that targets a 10% operating margin and $5.7B-$6.0B in revenues, which we believe is achievable if the economy remains stable. We now believe shares are overvalued (16x FY 2025 guidance) and above its three- and five-year averages.