American Eagle Outfitters (AEO) Falls More Steeply Than Broader Market: What Investors Need to Know

American Eagle Outfitters (AEO) closed the most recent trading day at $9.90, moving -2.17% from the previous trading session. The stock's performance was behind the S&P 500's daily loss of 0.33%. Elsewhere, the Dow lost 0.63%, while the tech-heavy Nasdaq lost 0.22%.

Shares of the teen clothing retailer have appreciated by 0.5% over the course of the past month, underperforming the Retail-Wholesale sector's gain of 0.67%, and the S&P 500's gain of 4.07%.

Investors will be eagerly watching for the performance of American Eagle Outfitters in its upcoming earnings disclosure. The company's upcoming EPS is projected at $0.2, signifying a 48.72% drop compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.23 billion, down 4.49% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $0.83 per share and a revenue of $5.19 billion, representing changes of -52.3% and -2.57%, respectively, from the prior year.

Any recent changes to analyst estimates for American Eagle Outfitters should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 9.04% decrease. American Eagle Outfitters is currently a Zacks Rank #5 (Strong Sell).

Valuation is also important, so investors should note that American Eagle Outfitters has a Forward P/E ratio of 12.19 right now. This represents a discount compared to its industry average Forward P/E of 17.97.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 209, positioning it in the bottom 16% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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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