American Eagle Outfitters (AEO) Laps the Stock Market: Here's Why

Core Viewpoint - American Eagle Outfitters is experiencing mixed performance, with a recent stock increase but a significant projected decline in earnings per share for the upcoming quarter [1][2]. Company Performance - In the latest trading session, American Eagle Outfitters (AEO) rose by 1.87% to $16.88, outperforming the S&P 500's gain of 1.23% [1]. - Over the past month, AEO shares have declined by 7.69%, underperforming the Retail-Wholesale sector, which saw a loss of 1.39% [1]. Earnings Projections - The upcoming earnings disclosure is expected to show earnings per share (EPS) of $0.42, a decrease of 12.5% from the same quarter last year [2]. - Revenue is projected at $1.32 billion, reflecting a 2.19% increase compared to the same quarter last year [2]. - For the entire year, earnings are forecasted at $1.11 per share and revenue at $5.32 billion, indicating declines of 36.21% and 0.15% respectively from the previous year [3]. Analyst Estimates - Recent changes to analyst estimates for American Eagle Outfitters suggest a positive outlook, as revisions often indicate short-term business trends [4]. - The Zacks Rank system, which incorporates these estimate changes, currently rates American Eagle Outfitters as 1 (Strong Buy), indicating strong potential for stock performance [6]. Valuation Metrics - American Eagle Outfitters has a Forward P/E ratio of 14.93, which is lower than the industry average of 17.59, suggesting it is undervalued compared to its peers [7]. - The Retail - Apparel and Shoes industry, part of the Retail-Wholesale sector, holds a Zacks Industry Rank of 40, placing it in the top 17% of over 250 industries [7].