American Eagle Outfitters (AEO) Stock Sinks As Market Gains: Here's Why

Company Performance - American Eagle Outfitters (AEO) closed at $25.14, down 3.31% from the previous trading session, underperforming the S&P 500 which gained 0.55% [1] - Over the past month, AEO shares have decreased by 2.44%, lagging behind the Retail-Wholesale sector's gain of 4.28% and the S&P 500's gain of 0.71% [1] Upcoming Earnings - The upcoming earnings release is projected to show an EPS of $0.71, reflecting a 31.48% increase year-over-year [2] - Revenue is expected to reach $1.73 billion, marking a 7.72% increase from the same quarter last year [2] Full Year Estimates - For the full year, analysts expect earnings of $1.38 per share and revenue of $5.47 billion, indicating a decrease of 20.69% in earnings and an increase of 2.68% in revenue compared to last year [3] Analyst Estimates - Recent changes to analyst estimates for AEO are important as they reflect short-term business trends, with positive revisions indicating a favorable business outlook [4] Zacks Rank and Performance - The Zacks Rank system, which evaluates estimate changes, currently ranks AEO as 1 (Strong Buy), with a history of outperforming the market [6] - The Zacks Consensus EPS estimate has increased by 3.5% in the past month [6] Valuation Metrics - AEO is trading at a Forward P/E ratio of 18.86, slightly above the industry average of 18.81 [7] - The PEG ratio for AEO is 8.38, compared to the industry average of 2.11, indicating a significant difference in expected earnings growth [7] Industry Context - The Retail - Apparel and Shoes industry, part of the Retail-Wholesale sector, holds a Zacks Industry Rank of 52, placing it in the top 22% of over 250 industries [8] - Historically, the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]