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Why American Eagle (AEO) is a Solid Pick for Your Portfolio

Zacks Equity Research
Updated

American Eagle Outfitters, Inc. AEO has emerged as a sound investment opportunity thanks to the company’s surging share price, positive earnings surprise streak, sturdy fundamentals and other growth catalysts. Shares of this specialty retailer of fashionable apparel and accessories have advanced roughly 17% over the past six months. Additionally, the stock carries a Zacks Rank #2 (Buy) with a long-term earnings growth rate of 10% and a VGM Score of “A”.

The company boasts a strong portfolio of well-established brands, with each focusing on the unique characteristics and rapidly changing preferences of target customers.

Moreover, the company strives to strengthen its product assortments by adding more compelling brands, managing inventory levels diligently and improving its eCommerce business. Further, American Eagle remains committed toward enhancing store sales by rationalizing its brick-and-mortar store fleet that includes closing underperforming stores.

Additionally, American Eagle has been strengthening its global presence for quite some time now after witnessing strong profitability at its overseas licensed stores, with little capital requirements. Apart from this, the company is striving to develop its omni-channel platform to reach customers in every possible way. Hence, it has been improving its website as well as mobile app.

AMER EAGLE OUTF Price and Consensus

AMER EAGLE OUTF Price and Consensus | AMER EAGLE OUTF Quote

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Further, American Eagle is continuously undertaking initiatives to reduce costs through supply chain efficiencies and its updated product allocation system, to boost its bottom line. Also, the recent popularity of its Aerie brand bodes well for future growth. We believe that all the abovementioned strategic initiatives will drive the company’s top and bottom lines, indicating solid long-term growth.

Other Stocks to Consider

Some other well-ranked stocks in the same industry include The Children's Place, Inc. PLCE, Christopher & Banks Corporation CBK and Destination XL Group, Inc. DXLG, all sporting a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
AMER EAGLE OUTF (AEO): Free Stock Analysis Report
 
CHILDRENS PLACE (PLCE): Free Stock Analysis Report
 
DESTINATION XL (DXLG): Free Stock Analysis Report
 
CHRISTOPHER&BNK (CBK): Free Stock Analysis Report
 
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