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American Eagle Outfitters (AEO) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·2-min read

American Eagle Outfitters (AEO) closed at $34.83 in the latest trading session, marking a -1.14% move from the prior day. This change lagged the S&P 500's 0.47% loss on the day.

Coming into today, shares of the teen clothing retailer had lost 3.93% in the past month. In that same time, the Retail-Wholesale sector lost 1%, while the S&P 500 gained 3.38%.

AEO will be looking to display strength as it nears its next earnings release. On that day, AEO is projected to report earnings of $0.52 per share, which would represent year-over-year growth of 1833.33%. Our most recent consensus estimate is calling for quarterly revenue of $1.2 billion, up 35.94% from the year-ago period.

AEO's full-year Zacks Consensus Estimates are calling for earnings of $2.08 per share and revenue of $4.97 billion. These results would represent year-over-year changes of +940% and +32.25%, respectively.

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Any recent changes to analyst estimates for AEO should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AEO is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, AEO currently has a Forward P/E ratio of 16.94. Its industry sports an average Forward P/E of 16.81, so we one might conclude that AEO is trading at a premium comparatively.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 20, which puts it in the top 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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