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UBS Reiterates Its Rating On Aeropostale Inc (NYSE:ARO) Shares

Boston, MA 08/13/2014 (wallstreetpr) – A chain of mall-based specialty retailer of casual apparel and accessories, Aeropostale Inc (NYSE:ARO) got the attention of at least two brokerages on Tuesday. The company is slated to announce its financial results for the second quarter on August 21 after the market closes. It will also hold a conference call at 4.15 p.m. EDT the same day.

Rating Of Stock

On Tuesday, UBS had reiterated its rating of Neutral on Aeropostale Inc (NYSE:ARO)’s stock with the price tag of $3.75 – $3.50. Considering that the stock price had already hit $3.50 on Tuesday’s regular trading session, there is little room for any upside reward.

Another investment advisor Wunderlich said on Tuesday that it was initiating coverage on the shares of Aeropostale with a rating of Hold and a price objective of $3.50, which means that there is no room for any upside potential. The brokerage indicated that there were encouraging signs from the company. However, those signs were not enough to be aggressive.

Aeropostale has been under pressure from teens, who have shifted to fashion items, forcing it to slash its prices. As a result, its shares plummeted over 70% in the last one-year period.

Analyst Eric Beder said that the management was trying to shift the mix with the tilt towards a slightly older but fashion-forward customer of teens. However, it has been facing difficulties in switching the existing customer base though it had met with some hits like the Bethany Mota line.

Room To Experiment

Wunderlich analyst said that Aeropostale Inc (NYSE:ARO) has some space to look for experiment in the near term with the available $150 million financing of Sycamore Partners.

Moreover, he believes that there was a need for a change in pricing. The analyst thinks that Aeropostale has to look for pricing integrity among the teen landscape to allow the company earns premium for shifting towards fashion items of higher level.

The brokerage also disclosed the possibility of turning itself more aggressive on the counter in future though there might have been concerns.

Published by Benjamin Roussey

Benjamin Roussey is from Sacramento, California. He has two master’s degrees and served four years in the U.S. Navy. His bachelor’s degree is from CSUS (1999) where he was on a baseball pitching scholarship. His second master’s degree is an MBA in Global Management from the University of Phoenix (2006). He has worked for small businesses, public agencies, and large corporations. He has lived in Korea and Saudi Arabia where he was an ESL instructor. Benjamin spends his time in between Northern California and Cabo San Lucas, Mexico, committing himself to his craft of freelance and website writing.

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