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American Eagle Outfitters (AEO) Stock Declines While Market Improves: Some Information for Investors

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In the latest market close, American Eagle Outfitters (AEO - Free Report) reached $19.08, with a -0.31% movement compared to the previous day. This change lagged the S&P 500's daily gain of 1.23%. At the same time, the Dow added 1.02%, and the tech-heavy Nasdaq gained 1.43%.

Shares of the teen clothing retailer have depreciated by 8.64% over the course of the past month, underperforming the Retail-Wholesale sector's gain of 0.58% and the S&P 500's loss of 0.54%.

The investment community will be paying close attention to the earnings performance of American Eagle Outfitters in its upcoming release. The company's upcoming EPS is projected at $0.47, signifying a 4.08% drop compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $1.31 billion, up 0.45% from the prior-year quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.78 per share and a revenue of $5.39 billion, indicating changes of +17.11% and +2.46%, respectively, from the former year.

It is also important to note the recent changes to analyst estimates for American Eagle Outfitters. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 last 30 days, the Zacks Consensus EPS estimate has remained unchanged. American Eagle Outfitters is holding a Zacks Rank of #2 (Buy) right now.

From a valuation perspective, American Eagle Outfitters is currently exchanging hands at a Forward P/E ratio of 10.76. This expresses a discount compared to the average Forward P/E of 16.08 of its industry.

Meanwhile, AEO's PEG ratio is currently 0.95. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Retail - Apparel and Shoes stocks are, on average, holding a PEG ratio of 1.81 based on yesterday's closing prices.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 149, which puts it in the bottom 41% of all 250+ industries.

The Zacks Industry Rank is ordered 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.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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