Shoe Carnival (SCVL) was downgraded Friday to "neutral" from "buy" at Sterne Agee after quarterly results met, but did not exceed, expectations.

Sam Poser of Sterne Agee cautioned against putting new money in Shoe Carnival at this time -- but not because the company is doing poorly. In fact, Poser finds the retailer to be very secure, with a management team that accomplishes its goals. The company's valuation has just notched too high.

"We believe SCVL is a very good company with a solid management team that is executing properly," Poser wrote in a note to clients. "However, the results and outlook met our expectations but did not exceed them. The stock has already passed our prior (price target) of $23, and given no new catalysts we see no reason to put new money to work."

Analyst praise is just one of the reasons shareholders have found Shoe Carnival attractive in the past. While the stock has consistently been a safe bet throughout 2012, it is also the philanthropic work and events that keep Shoe Carnival under a favorable light.

Those who stand to gain from Shoe Carnival's downgrade include direct competitors Foot Locker (FL) and DSW (DSW) as well as rebounding clothing distributors Urban Outfitters (URBN) and American Eagle Outfitters (AEO).

American Eagle Outfitters was upgraded at Bank of America on Friday morning to "neutral" from "sell," as competitive pressures have calmed and the company's second quarter was in line with estimates. Earnings of 21 cents a share impressed the research firm, as new managerial strategies helped generate attractive back-to-school results.

Similarly, Urban Outfitters has experienced a surge in success following a fairly tumultuous year. The company beat estimates in its second-quarter earnings report, prompting many analysts to raise their price targets on the once floundering company.

As the tables continue to turn on 2012's retail successes and failures, merchants are positioned to benefit from Shoe Carnival's Friday downgrade. Poser noted in his report that Sterne Agee will not become more constructive on the stock until the economy improves and store openings accelerate.

Investors appear to be agreeing with Poser, as shares of Shoe Carnival were down more than 8.4% Friday afternoon. The company is up 30% this year to $22.30. 

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