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What’s the Word on Wall Street for Apparel Retailers?

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Rating synopsis

As of September 27, 56% of the 18 analysts covering American Eagle Outfitters (AEO) stock have given it “hold” ratings. Another 39% of analysts have given it “buys,” and the remaining analysts have given it “sells.”

Abercrombie & Fitch (ANF) has received “hold” ratings from 50% of the 16 analysts covering its stock. Another 31% have given it “sells,” and the rest have given it “buys.”

For Urban Outfitters (URBN), 70% of the 23 analysts covering its stock have maintained “holds,” while 26% have given it “buys.” For L Brands (LB), 63% of the 27 analysts covering its stock have given it “hold” ratings, while just 22% have given it “buys.”

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The arrival of online retailers has pushed apparel retailers to revise their growth strategies to retain market share. Apparel retailers have been working on providing an omnichannel experience by integrating all their sales channels. Loyalty programs, improvements made in technology, and the overhauling of product assortments are likely to help these retailers attract and retain more customers.

Target price revisions

Except for American Eagle Outfitters, there were many price revision activities for the above-mentioned stocks in September. Analysts’ 12-month average target price for AEO is $26.27, which reflects a 6.4% upside to the stock’s price as of September 27.

On September 4, Nomura slashed its price target on Abercrombie & Fitch to $22.00 from the $23.00 it had projected earlier. Currently, analysts’ 12-month average target price for ANF is $22.83, which reflects an 8.8% upside to its price as of September 27.

On September 26, D.A. Davidson initiated coverage on Urban Outfitters stock with a “neutral” rating and a price target of $40.00. Analysts’ 12-month average target price for URBN stock is $50.61, which reflects a 21.7% upside.

On September 19, UBS lowered its price target for L Brands stock to $30.00 from $31.00. On September 18, Bank of America Merrill Lynch upgraded its rating on the stock to a “neutral” and increased its price target to $33.00 from its earlier level of $26.00. Analysts’ 12-month average price target for the stock is $32.14, which reflects a 6.4% upside.

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