American Eagle lowered its annual sales forecast
Shares of American Eagle Outfitters (NYSE:AEO) are plummeting today, down 13.7% at $17.73 at last look. The retailer's third-quarter earnings of 48 cents per share came in two cents above estimates, though revenue missed the mark. The company also lowered its annual sales forecast and expects current-quarter comparable sales to rise 1% -- below analysts' expectations of 2.2%.
In response, J.P. Morgan Securities downgraded AEO to "neutral" from "overweight," with a price-target cut to $23 from $27. Several other analysts lowered their price objectives as well, but the 12-month consensus price target of $22 is still a 23.4% premium to current levels.
Options bears are chiming in as well, with 24,000 puts exchanged so far in comparison to 6,783 calls -- 15 times the overall options volume typically seen at this point. The January 24, 2025 15-strike put is the most popular by far, with new positions opening there.
The negative price action has AEO moving back down toward its Nov. 21, 52-week low of $16.88. Should this negative price action hold, shares will notch their worst single-session dip since November 2023 and their first loss in the last six sessions. Since the start of the year, the equity is down 16.5%.