KeyBanc Upgrades Aeropostale, Inc. (ARO) to Hold
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Price: $0.15 --0%
Rating Summary:
5 Buy, 25 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 4 | Down: 8 | New: 54
Rating Summary:
5 Buy, 25 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 4 | Down: 8 | New: 54
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KeyBanc upgraded Aeropostale, Inc. (NYSE: ARO) from Underweight to Hold and removed its price target (prior $7.00).
Analyst Edward Yruma said, "The stock is down 29% since August 13 (vs. +6% for the S&P 500 and +9% for the RLX) owing to continued market share loss, as well as an unfavorable teen retailing environment. Many of the risk factors that we highlighted in our downgrade (potential cash burn, difficulty in repositioning the assortment, etc.) have come to fruition, arguably a bit faster than we originally expected. Management seems to have acknowledged the need to more aggressively downsize the store base and conserve cash via a slowdown in P.S. growth. At this stage, the Company is able to fund a more aggressive store closure plan with the revolver and, not require a PIPE. The 0.3x 2014 EV/sales valuation is one of the least expensive in our coverage, and in our opinion, already reflects a continuation of poor results. With a downside case a bit more difficult to make at this stage, we step to the sidelines and upgrade ARO to a HOLD rating."
For an analyst ratings summary and ratings history on Aeropostale, Inc. click here. For more ratings news on Aeropostale, Inc. click here.
Shares of Aeropostale, Inc. closed at $9.36 yesterday.
Analyst Edward Yruma said, "The stock is down 29% since August 13 (vs. +6% for the S&P 500 and +9% for the RLX) owing to continued market share loss, as well as an unfavorable teen retailing environment. Many of the risk factors that we highlighted in our downgrade (potential cash burn, difficulty in repositioning the assortment, etc.) have come to fruition, arguably a bit faster than we originally expected. Management seems to have acknowledged the need to more aggressively downsize the store base and conserve cash via a slowdown in P.S. growth. At this stage, the Company is able to fund a more aggressive store closure plan with the revolver and, not require a PIPE. The 0.3x 2014 EV/sales valuation is one of the least expensive in our coverage, and in our opinion, already reflects a continuation of poor results. With a downside case a bit more difficult to make at this stage, we step to the sidelines and upgrade ARO to a HOLD rating."
For an analyst ratings summary and ratings history on Aeropostale, Inc. click here. For more ratings news on Aeropostale, Inc. click here.
Shares of Aeropostale, Inc. closed at $9.36 yesterday.
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