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

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In the latest close session, American Eagle Outfitters (AEO - Free Report) was down 1.97% at $17.46. The stock's performance was behind the S&P 500's daily gain of 0.58%. Elsewhere, the Dow gained 0.69%, while the tech-heavy Nasdaq added 1.05%.

Prior to today's trading, shares of the teen clothing retailer had gained 11.87% outpaced the Retail-Wholesale sector's gain of 4.75% and the S&P 500's gain of 0.97%.

Investors will be eagerly watching for the performance of American Eagle Outfitters in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $0.49, marking a 7.55% fall compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $1.46 billion, up 6.83% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $2.24 per share and a revenue of $5.86 billion, demonstrating changes of +49.33% and +6.63%, respectively, from the preceding year.

Investors should also note any recent changes to analyst estimates for American Eagle Outfitters. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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 last 30 days, the Zacks Consensus EPS estimate has moved 3.16% higher. American Eagle Outfitters is holding a Zacks Rank of #3 (Hold) right now.

In the context of valuation, American Eagle Outfitters is at present trading with a Forward P/E ratio of 7.97. This signifies a discount in comparison to the average Forward P/E of 14.48 for its industry.

We can additionally observe that AEO currently boasts a PEG ratio of 4.06. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Retail - Apparel and Shoes industry held an average PEG ratio of 1.25.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 160, placing it within the bottom 35% of over 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 follow all of these stock-moving metrics, and many more, on Zacks.com.

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