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American Eagle Outfitters (AEO) Stock Slides as Market Rises: Facts to Know Before You Trade

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American Eagle Outfitters (AEO - Free Report) closed the latest trading day at $20.05, indicating a -1.38% change from the previous session's end. This move lagged the S&P 500's daily gain of 0.16%. Meanwhile, the Dow experienced a drop of 0.37%, and the technology-dominated Nasdaq saw an increase of 0.78%.

Shares of the teen clothing retailer witnessed a loss of 9.2% over the previous month, trailing the performance of the Retail-Wholesale sector with its loss of 0.07% and the S&P 500's gain of 1.67%.

Analysts and investors alike will be keeping a close eye on the performance of American Eagle Outfitters in its upcoming earnings disclosure. On that day, American Eagle Outfitters is projected to report earnings of $0.47 per share, which would represent a year-over-year decline of 4.08%. Meanwhile, our latest consensus estimate is calling for revenue of $1.31 billion, up 0.45% from the prior-year quarter.

AEO's full-year Zacks Consensus Estimates are calling for earnings of $1.78 per share and revenue of $5.39 billion. These results would represent year-over-year changes of +17.11% and +2.46%, respectively.

Any recent changes to analyst estimates for American Eagle Outfitters should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Empirical research indicates that these revisions in estimates have a direct correlation with impending 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. Over the past month, the Zacks Consensus EPS estimate has remained steady. American Eagle Outfitters is currently a Zacks Rank #3 (Hold).

In terms of valuation, American Eagle Outfitters is presently being traded at a Forward P/E ratio of 11.43. For comparison, its industry has an average Forward P/E of 15.8, which means American Eagle Outfitters is trading at a discount to the group.

Meanwhile, AEO's PEG ratio is currently 1.01. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Apparel and Shoes industry currently had an average PEG ratio of 1.88 as of yesterday's close.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 97, putting it in the top 39% 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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