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American Eagle Outfitters (AEO) Dips More Than Broader Markets: What You Should Know

In the latest trading session, American Eagle Outfitters (AEO) closed at $14.11, marking a -1.67% move from the previous day. This move lagged the S&P 500's daily loss of 0.4%. At the same time, the Dow added 0.08%, and the tech-heavy Nasdaq lost 0.18%.

Heading into today, shares of the teen clothing retailer had lost 18% over the past month, lagging the Retail-Wholesale sector's loss of 15.28% and the S&P 500's loss of 9.39% in that time.

American Eagle Outfitters will be looking to display strength as it nears its next earnings release, which is expected to be May 26, 2022. The company is expected to report EPS of $0.25, down 47.92% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.14 billion, up 10.04% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2 per share and revenue of $5.69 billion, which would represent changes of -8.68% and +13.47%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for American Eagle Outfitters. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 0.87% lower. American Eagle Outfitters is currently a Zacks Rank #3 (Hold).

In terms of valuation, American Eagle Outfitters is currently trading at a Forward P/E ratio of 7.19. Its industry sports an average Forward P/E of 8.98, so we one might conclude that American Eagle Outfitters is trading at a discount comparatively.

Also, we should mention that AEO has a PEG ratio of 0.65. 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. AEO's industry had an average PEG ratio of 0.8 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 166, putting it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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

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