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American Eagle Outfitters (AEO) Gains But Lags Market: What You Should Know

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In the latest trading session, American Eagle Outfitters (AEO - Free Report) closed at $24.20, marking a +0.62% move from the previous day. This change lagged the S&P 500's 0.98% gain on the day.

Prior to today's trading, shares of the teen clothing retailer had lost 12.35% over the past month. This has lagged the Retail-Wholesale sector's gain of 0.25% and the S&P 500's gain of 2.57% in that time.

AEO will be looking to display strength as it nears its next earnings release. In that report, analysts expect AEO to post earnings of $0.60 per share. This would mark year-over-year growth of 71.43%. Meanwhile, our latest consensus estimate is calling for revenue of $1.23 billion, up 19.22% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.20 per share and revenue of $4.96 billion. These totals would mark changes of +1000% and +32.02%, respectively, from last year.

Any recent changes to analyst estimates for AEO should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AEO is currently a Zacks Rank #2 (Buy).

Looking at its valuation, AEO is holding a Forward P/E ratio of 10.92. This valuation marks a discount compared to its industry's average Forward P/E of 11.38.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 65, putting it in the top 26% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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