UPDATE 1-RESEARCH ALERT-BofA raises American Eagle to Buy

(Adds details, share movement)

Sept 10 (Reuters) - Banc of America Securities upgraded American Eagle Outfitters Inc (AEO.N) to "buy" from "neutral," saying there were several potential positive catalysts for the company, including its new promotional stance.

The brokerage stated that American Eagle's new strategy of "offensive" promotions, which include heightened promotional events, have been effective and could be less expensive than the clearance strategy previously employed.

"Importantly, they have promotions planned for the rest of the year," analyst Dana Cohen said.

In a note to clients, Cohen said the company has also been planning inventories very conservatively that could help protect gross margins. "Quick inventory turns gives the company the ability to still tweak product for the upcoming holiday season" she added, while raising her price target on the stock by $4 to $20.

The analyst also noted that key competitor Abercrombie & Fitch (ANF.N) had recently been taking prices up and will continue to avoid promotions.

Shares of the Pittsburgh, Pennsylvania-based company rose more than 2 percent to $16.39 in morning trade on the New York Stock Exchange. (Reporting by Divya Nair in Bangalore; Editing by Anil D'Silva)