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Bear Of The Day: American Eagle (AEO)

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American Eagle (AEO - Free Report) is a Zacks Rank #5 (Strong Sell) and today it is the Bear of the Day.  Let’s take a look at the recent earnings, estimate moves and valuation.

Description

American Eagle Outfitters is a specialty retailer of all-American casual apparel, accessories, and footwear for men and women between the ages of 16 and 34.

Recent Earnings

On May 17, the company reported earnings of $0.16 and that was 1 cent below the Zacks Consensus Estimate.  Despite a solid sales number, investors dumped shares of AEO, sending them lower by more than 16% in the session following the report.

This was the first earnings miss of the Zacks Consensus Estimate for AEO since 2011.

Estimates

The reason for the stock being a Zacks Rank #5 (Strong Sell) is usually found when looking at the earnings estimate moves.  AEO had a Zacks Consensus Estimate for 2017 of $1.37 in December but that number slipped to $1.25 in March and is now down to $1.13.

The 2018 Zacks Consensus Estimate has also moved lower.  The number was at $1.39 in February and has now dropped to $1.17.

Valuation

Retail stocks have been crushed over the last few months and AEO is no exception.  The stock trades at just under 10x forward earnings.  The price to book of about 2 is well below the industry average as in the price to sales multiple of 0.5x.

 

American Eagle Outfitters, Inc. Price and Consensus

American Eagle Outfitters, Inc. Price and Consensus | American Eagle Outfitters, Inc. Quote

 



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