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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) ended the recent trading session at $24.30, demonstrating a -0.69% swing from the preceding day's closing price. This change lagged the S&P 500's 1.26% gain on the day. Meanwhile, the Dow experienced a rise of 1.18%, and the technology-dominated Nasdaq saw an increase of 1.99%.

The the stock of teen clothing retailer has risen by 0.41% in the past month, leading the Retail-Wholesale sector's loss of 0.75% and the S&P 500's loss of 2.68%.

The upcoming earnings release of American Eagle Outfitters will be of great interest to investors. The company's earnings per share (EPS) are projected to be $0.26, reflecting a 52.94% increase from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $1.14 billion, indicating a 5.54% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $1.71 per share and revenue of $5.43 billion, which would represent changes of +12.5% and +3.29%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for American Eagle Outfitters. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. American Eagle Outfitters presently features a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that American Eagle Outfitters has a Forward P/E ratio of 14.29 right now. Its industry sports an average Forward P/E of 15.32, so one might conclude that American Eagle Outfitters is trading at a discount comparatively.

Also, we should mention that AEO has a PEG ratio of 1.14. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Retail - Apparel and Shoes industry was having an average PEG ratio of 1.27.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 165, finds itself in the bottom 35% echelons of all 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.

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


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