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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 the most recent trading day at $24.39, moving -1.37% from the previous trading session. This change lagged the S&P 500's daily loss of 0.11%.

Coming into today, shares of the teen clothing retailer had lost 10.43% in the past month. In that same time, the Retail-Wholesale sector gained 3.35%, while the S&P 500 gained 4.61%.

Wall Street will be looking for positivity from AEO as it approaches its next earnings report date. On that day, AEO is projected to report earnings of $0.60 per share, which would represent year-over-year growth of 71.43%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.23 billion, up 19.22% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.20 per share and revenue of $4.96 billion. These totals would mark changes of +1000% and +32.02%, respectively, from last year.

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Investors might also notice recent changes to analyst estimates for AEO. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.11% higher. AEO is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that AEO has a Forward P/E ratio of 11.23 right now. This represents a discount compared to its industry's average Forward P/E of 11.61.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 30, putting it in the top 12% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Zacks Investment Research