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American Eagle Outfitters (AEO) Gains As Market Dips: What You Should Know

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In the latest trading session, American Eagle Outfitters (AEO - Free Report) closed at $31.28, marking a +1.23% move from the previous day. This move outpaced the S&P 500's daily loss of 1.08%.

Heading into today, shares of the teen clothing retailer had lost 10.67% over the past month, lagging the Retail-Wholesale sector's loss of 4.25% and the S&P 500's gain of 2.93% 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 $0.54, up 1900% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.23 billion, up 38.9% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.12 per share and revenue of $5.02 billion, which would represent changes of +960% and +33.52%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for AEO. These recent revisions tend to reflect the evolving nature of short-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 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 1.76% higher. AEO is currently a Zacks Rank #2 (Buy).

Investors should also note AEO's current valuation metrics, including its Forward P/E ratio of 14.6. This represents a discount compared to its industry's average Forward P/E of 15.43.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 55, putting it in the top 22% 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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