An analyst on Friday said that Aeropostale Inc. will likely continue to take market share from other teen retailers and upgraded the stock due to a decline in its share price.
Citi Investment Research analyst Kimberly Greenberger wrote in a note to investors that Aeropostale Inc. has fallen below its $27 price target, so she increased its rating to "Hold" from "Sell."
Shares have fallen 30 percent since the beginning of September and closed at $24.16 on Friday.
Greenberger noted that the company had relatively strong same-store sales in September. Aeropostale this week reported sales in stores open at least one year — a key retail metric known as same-store sales — in September rose 5 percent, outpacing most other specialty retailers in the sector. As consumers cut back amid a difficult economic environment, Aeropostale has attracted bargain shoppers by focusing on lower price points and promotions.
"We believe Aeropostale may continue to gain market share from teen competitors including Abercrombie & Fitch Co. and American Eagle Outfitters Inc. given Aeropostale's solid merchandise execution at attractive price points and due to weaknesses at Abercrombie and American Eagle," Greenberger wrote.
