What's Happening with aeo
Specialty retailer American Eagle Outfitters (AEO) reports third-quarter results December 11. The company is expected to report earnings of $0.48 per share, in-line with the same period last year. AEO is trading in the lower end of its 52-week range with shares down 21% on the year.
Technical Analysis
AEO was recently trading at $15.30 down $9 from its 12-month high and $1.64 above its 12-month low. InvestorsObserver's Stock Score Report gives AEO a 18 long-term technical score and a 31 short-term technical score. The stock has recent support above $14.5 and recent resistance below $16.75. Of the 13 analysts who cover the stock 5 rate it Strong Buy, 0 rate it Buy, 6 rate it Hold, 1 rate it Sell, and 1 rate it Strong Sell, AEO gets a score of 41 from InvestorsObserver's Stock Score Report.
Analysts' Thoughts
Wall Street is incredibly bearish on AEO at this time. While retail has been a strong part of the market during the economic boom, specialty and upscale retail have not enjoyed the strong growth that discount and e-commerce retailers have enjoyed. American Eagle earnings are up 22% per annum over the last five years, but looking ahead analysts forecast profits to rise a very modest 3.8% annually over the next five years. The big drop in earnings growth is a major factor in the stock's underperformance. The company has topped estimates the last three quarters, and it will need to extend that streak for any chance of a bull run following the quarterly report. AEO trades at just 10 times earnings, which makes it attractive, but the low valuation alone will not bring bullish sentiment back into the stock until the company is able to show consistent estimate-topping quarterly numbers. Analysts have an average price target of $19.00 on the stock.