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American Eagle Outfitters (AEO) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, American Eagle Outfitters (AEO - Free Report) closed at $35.51, marking a +0.88% move from the previous day. This move outpaced the S&P 500's daily gain of 0.25%.

Prior to today's trading, shares of the teen clothing retailer had lost 3.3% over the past month. This has lagged the Retail-Wholesale sector's loss of 3.19% and the S&P 500's gain of 1.65% in that time.

Investors will be hoping for strength from AEO as it approaches its next earnings release, which is expected to be September 2, 2021. The company is expected to report EPS of $0.52, up 1833.33% from the prior-year quarter. 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.

Investors should also note any recent changes to analyst estimates for AEO. These revisions help to show the ever-changing nature of near-term business trends. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. AEO is currently a Zacks Rank #2 (Buy).

Investors should also note AEO's current valuation metrics, including its Forward P/E ratio of 16.92. Its industry sports an average Forward P/E of 16.92, so we one might conclude that AEO is trading at a no noticeable deviation comparatively.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 106, putting it in the top 42% 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.

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