American Eagle Outfitters (AEO) Registers a Bigger Fall Than the Market: Important Facts to Note

In the latest close session, American Eagle Outfitters (AEO) was down 1.19% at $18.32. The stock's performance was behind the S&P 500's daily loss of 0.11%. At the same time, the Dow lost 0.56%, and the tech-heavy Nasdaq gained 0.35%.

The teen clothing retailer's shares have seen an increase of 5.58% over the last month, surpassing the Retail-Wholesale sector's gain of 1.33% and the S&P 500's gain of 0.51%.

Analysts and investors alike will be keeping a close eye on the performance of American Eagle Outfitters in its upcoming earnings disclosure. On that day, American Eagle Outfitters is projected to report earnings of $0.11 per share, which would represent year-over-year growth of 137.93%. Our most recent consensus estimate is calling for quarterly revenue of $1.18 billion, up 8.52% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.76 per share and a revenue of $5.78 billion, indicating changes of +17.33% and +5.19%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for American Eagle Outfitters. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.67% higher. American Eagle Outfitters currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that American Eagle Outfitters has a Forward P/E ratio of 10.52 right now. Its industry sports an average Forward P/E of 16.34, so one might conclude that American Eagle Outfitters is trading at a discount comparatively.

Investors should also note that AEO has a PEG ratio of 1.31 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. AEO's industry had an average PEG ratio of 1.55 as of yesterday's close.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 72, placing it within the top 30% of over 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.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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

This article originally published on Zacks Investment Research (zacks.com).

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