American Eagle Downgraded On Concerns Over Competition, Valuation

American Eagle Outfitters Inc. was downgraded to perform from outperform at Oppenheimer, which cited relative valuation and signs of increasing competition from Abercrombie & Fitch Co.'s Hollister-brand stores. Analyst Anna Andreeva also cut her stock price target to $17, which is just 3.7% above Friday's closing price of $16.40, from $19. She said that while the apparel retailer "has done everything right this year," upward earnings revisions are likely to level off in 2016, as the company bumps up against tough year-over-year comparisons. The stock has soared 18% year to date, while the SPDR S&P Retail ETF has lost 5.1% and the S&P 500 has gained 1.5%. Andreeva also expressed concern that market share gains could slow given that Hollister appears to have gained some footing. Hollister reported earlier this month the first quarterly same-store sales growth since the fourth quarter of 2011. Abercrombie's stock has soared 39% the past three months while American Eagle's has lost 2.1%.