AEO - American Eagle Outfitters is cut at Jefferies due to recession risk

American Eagle Outfitters ( NYSE: AEO ) swung lower in early trading on Wednesday after Jefferies dropped its rating on the mall stock to Hold from Buy.

The firm does not think AEO will perform well during a recession in the U.S. with consumers likely to pull back on spending.

"Clothing/footwear is typically a low performing category from the start to the exit of the recession and usually recovers with overall spending. On average, over the past 8 recessions, the clothing/footwear category saw no growth until the quarter coming out of the recession," warned analyst Randal Konik.

Jefferies lowered its price target on AEO to $16 from $18 due to a lower expectation for sales in 2023.

Shares of American Eagle Outfitters ( AEO ) fell back 3.93% premarket to $15.40 vs. the 52-week trading range of $9.46 to $23.27.

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