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American Eagle Outfitters (AEO) Increases Yet Falls Behind Market: What Investors Need to Know

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American Eagle Outfitters (AEO - Free Report) closed the latest trading day at $23.60, indicating a +0.38% change from the previous session's end. The stock's change was less than the S&P 500's daily gain of 0.74%. At the same time, the Dow lost 0.01%, and the tech-heavy Nasdaq gained 1.68%.

Heading into today, shares of the teen clothing retailer had gained 1.29% over the past month, outpacing the Retail-Wholesale sector's gain of 1.06% and the S&P 500's gain of 0.8% in that time.

Market participants will be closely following the financial results of American Eagle Outfitters in its upcoming release. The company is predicted to post an EPS of $0.26, indicating a 52.94% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.14 billion, up 5.54% from the year-ago period.

AEO's full-year Zacks Consensus Estimates are calling for earnings of $1.71 per share and revenue of $5.43 billion. These results would represent year-over-year changes of +12.5% and +3.29%, respectively.

It's also important for investors to be aware of any recent modifications to analyst estimates for American Eagle Outfitters. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 4.44% higher within the past month. As of now, American Eagle Outfitters holds a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, American Eagle Outfitters is holding a Forward P/E ratio of 13.73. This indicates a discount in contrast to its industry's Forward P/E of 14.56.

We can also see that AEO currently has a PEG ratio of 1.1. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Apparel and Shoes industry had an average PEG ratio of 1.16 as trading concluded yesterday.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 179, putting it in the bottom 29% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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