Sydney Sweeney Couldn’t Save American Eagle Stock. Here’s Why Analysts Think You Should Ditch AEO Here.

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};be("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat(Vn)),notifLabel:document.querySelector(".".concat($n))};t.notifDropdown&&ro(e,t)}))}()}};]]>Aditya RaghunathThu, Aug 28, 2025, 6:34 PM 3 min readDespite generating significant buzz with Sydney Sweeney's controversial marketing campaign, American Eagle Outfitters (AEO) faces fundamental challenges that celebrity endorsements can't fix, according to Bank of America analysts, who downgraded the stock to "Underperform."Earlier this month, the "Euphoria" star's fall denim campaign sparked a meme stock mania. Moreover, American Eagle stock gained 23% on Aug. 4, after President Trump praised the marketing on Truth Social.Dear Broadcom Stock Fans, Mark Your Calendars for September 4After a 222% Surge, Is SoFi Stock Headed Even Higher?CEO Alex Karp Just Sold $60 Million in Palantir Stock. Should You Ditch PLTR Here Too?Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today!Bank of America believes both the American Eagle namesake brand and the Aerie sub-brand lack pricing power to navigate potential tariffs effectively. The firm expects a prolonged recovery following first-quarter assortment issues, noting uncertainty around whether American Eagle's non-denim products can gain traction. At the same time, Aerie faces secular challenges in intimates and swimwear categories."Pulling back on promos could curtail traffic, and we see risk that Aerie could pull back on store opening plans next year if the retail environment remains tough," analysts warned, setting a $10 price target that implies 22.5% downside.American Eagle expects second-quarter revenue to fall 5%, comparable sales to drop 3%, and gross margins to compress year-over-year (YoY). The retailer already took a $75 million write-down on spring and summer merchandise after pulling full-year guidance due to slow sales and steep discounting.While Sweeney's campaign generated the highest Google search interest for American Eagle in over 20 years, translating online buzz into sustainable sales growth remains uncertain. With shares down 27% year-to-date (YTD), the retailer's merchandising missteps and macroeconomic headwinds present deeper challenges than celebrity marketing can address.www.barchart.comAmerican Eagle's operational challenges run deeper than the Bank of America downgrade suggests. 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