Top investors say American Eagle Outfitters Inc. (AEO) ticks everything they need

American Eagle Outfitters Inc. (NYSE: AEO) stock jumped 4.50% on Wednesday to $12.07 against a previous-day closing price of $11.55. With 11.01 million shares changed hands, the volume of the stock remained heavier than its average volume of 4.16 million shares. During the session, the Apparel Retail company that operates in wider Consumer Cyclical sector, reached to the highest price of $12.46 whereas the lowest price it dropped to was $11.74. The 52-week range on AEO shows that it touched its highest point at $17.09 and its lowest point at $9.46 during that stretch. It currently has a 1-year price target of $15.36. With its current market cap of 2.62 billion, AEO has annualized dividend of $0.40 while the current yield stands at 3.31%. Beta for the stock currently stands at 1.50.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of AEO was down-trending over the past week, with a drop of -6.80%, but this was down by -6.65% over a month. Three-month performance dropped to -18.45% while six-month performance fell -7.15%. The stock lost -6.65% in the past year, while it has lost -13.54% so far this year. A look at the trailing 12-month EPS for AEO yields 0.60 with Next year EPS estimates of 1.23. For the next quarter, that number is 0.18. This implies an EPS growth rate of -70.00% for this year and 9.50% for next year. EPS is expected to grow by 15.21% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -10.60%.

Float and Shares Shorts:

At present, 191.20 million AEO shares are outstanding with a float of 175.68 million shares on hand for trading. On Apr 27, 2023, short shares totaled 14.2 million, which was 7.20% higher than short shares on Mar 30, 2023. In addition to Mr. Jay L. Schottenstein as the firm’s Exec. Chairman & CEO, Mr. Michael A. Mathias serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 93.70% of AEO’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 56.51% of AEO, in contrast to 35.02% held by mutual funds. Shares owned by individuals account for 17.54%. As the largest shareholder in AEO with 13.30% of the stake, BlackRock Fund Advisors holds 26,003,866 shares worth 26,003,866. A second-largest stockholder of AEO, Fidelity Management & Research Co, holds 25,008,882 shares, controlling over 12.79% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in AEO, holding 19,051,505 shares or 9.74% stake. With a 6.47% stake in AEO, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 12,659,236 shares are owned by the mutual fund manager. The Fidelity Blue Chip Growth Fund, which owns about 6.03% of AEO stock, is the second-largest Mutual Fund holder. It holds 11,797,180 shares valued at 157.96 million. Vanguard Total Stock Market ETF holds 2.67% of the stake in AEO, owning 5,220,503 shares worth 69.9 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jan 27, 2023, AEO reported revenue of $1.06B and operating income of $41.90M. The EBITDA in the recently reported quarter was $93.72M and diluted EPS was $0.16.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for AEO since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With AEO analysts setting a high price target of $19.00 and a low target of $10.00, the average target price over the next 12 months is $13.82. Based on these targets, AEO could surge 57.42% to reach the target high and fall by -17.15% to reach the target low. Reaching the average price target will result in a growth of 14.5% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded AEO stock several times over the past three months with 23 Buys and 24 Sells. In these transactions, 435,252 shares were bought while 229,779 shares were sold. The number of buy transactions has increased to 56 while that of sell transactions has risen to 40 over the past year. The total number of shares bought during that period was 947,994 while 478,337 shares were sold.

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