Taking a Flyer on American Eagle
S&P likes the youth apparel retailer's merchandising and marketing strategies and rates the shares strong buy
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We believe American Eagle Outfitters (AEO; $25) is one of the most compelling investments in the youth apparel retailer space, given the leading brand positioning of its American Eagle brand with the youth demographic.
The American Eagle brand is considered among the "coolest" brands (second only to Nike (NKE)), according to Teen Research Unlimited in spring 2007. We believe the company's focus on its core 15- to 25-year-old customer, along with improved merchandise, store upgrades, and a differentiated marketing strategy that reaches its target audience, drives its success.