According to Jefferies, American Eagle Outfitters may have trouble moving forward. Analyst Randall J. Konik downgraded the retailer to prevent purchases. Analysts see the stock as a possible recession and a resulting slowdown in consumer spending. He also cut his price target to $16 from $18. The new target is just below where American Eagle closed on Tuesday. “Clothing/Shoes is generally the underperforming category from the beginning to the exit of a recession and has generally recovered along with overall spending. On average, over the past 8 recessions, the clothing/shoes category has No growth seen until coming out. Recession,” Konik wrote in a Wednesday note. He also cut his sales growth outlook for 2023, expecting revenue to be flat for the year. That’s below the consensus call for a 3% expansion. At 14 times forward earnings, Konik said the stock is trading at a premium to its three- and five-year average valuations. American Eagle shares have a upside of more than 14% in 2023. They are also up 64% since late September. The stock dipped 1.8% in the premarket. AEO YTD Mount in 2023 AEO downgraded other apparel companies to holdings from Buy, AKA Brands, Torrid Holdings and Lulu’s Fashion Lounge due to the risk of lack of demand. Konick reiterated his buy ratings for footwear brands Nike, Foot Locker and Boot Barn, citing more expected resilience in the footwear sector. “While our analysis of PCE category spend combines footwear w/apparel sales, it is our belief that footwear will be more resilient. Footwear typically has a shorter replacement cycle than apparel, which we believe will drive sales growth.” reinforces flexibility. Within the footwear space, we prefer BOOT, FL and NKE,” wrote the analyst. —Michael Bloom of CNBC contributed to this report.