American Eagle hoped Sydney Sweeney’s viral jeans ad would boost sales and brand visibility, but some analysts say the ad might not be enough to offset the retailer’s financial setbacks. Bank of America recently downgraded the stock. They cited tariff pressures and limited pricing power. This suggests the buzz from the Sweeney campaign may not translate into long-term growth.
Sydney Sweeney might have negative effect on American Eagle’s stocks
Bank of America cut American Eagle’s rating to “underperform,” the equivalent of a sell recommendation, and lowered its price target to $10 per share. It is about 21% below the stock’s recent trading level. Analysts warned that both American Eagle and its Aerie brand “are in tough positions to navigate tariffs; we do not think that either brand has much pricing power.” (via Business Insider)
In its report, BofA noted that while the retailer has successfully cut costs in recent years, “the low-hanging fruit has been accomplished and marketing spend remains below peers.” The firm added that new pressures on profit will likely outweigh the momentum from Sydney Sweeney’s jeans campaign.
The downgrade came shortly after American Eagle admitted tariffs could shave $40 million off gross profit for the year. BofA also slashed its earnings expectations, cutting 2025 EPS by 8% and reducing profit outlook for next year by 30%.
American Eagle launched its campaign with Sydney Sweeney in late July, pushing the brand into the meme-stock category. The video featured Sweeney whispering a play on words about “genes” and “jeans,” but many critics slammed it for evoking eugenics. Others argued the hypersexualized tone clashed with the campaign’s stated mission of raising domestic violence awareness, especially since proceeds from sales were pledged to Crisis Text Line.
Despite the backlash, the ad generated immediate attention. Shares surged as much as 33% following the launch. It was aided in part by a surprising endorsement from former President Donald Trump. But the rally proved short-lived, with stock still down 23% year-to-date.
All in all, while Sydney Sweeney’s name brought temporary attention and cultural debate. However, BofA predicts tariffs, limited pricing power, and weak spending on marketing will continue to drag American Eagle down.
