Quantcast

Is American Eagle Outfitters (AEO) Stock Undervalued Right Now?


Shutterstock photo

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is American Eagle Outfitters (AEO). AEO is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 13.06, while its industry has an average P/E of 13.13. Over the past 52 weeks, AEO's Forward P/E has been as high as 18.56 and as low as 10.70, with a median of 14.11.

Investors should also recognize that AEO has a P/B ratio of 2.91. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.71. Over the past 12 months, AEO's P/B has been as high as 4.08 and as low as 2.34, with a median of 3.03.

These are only a few of the key metrics included in American Eagle Outfitters's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AEO looks like an impressive value stock at the moment.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

American Eagle Outfitters, Inc. (AEO): Get Free Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Investing , Investing Ideas , Stocks
Referenced Symbols: AEO



More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research










Research Brokers before you trade

Want to trade FX?