{"id":13059,"date":"2023-05-24T07:32:10","date_gmt":"2023-05-24T11:32:10","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/american-eagle-outfitters-stock-to-likely-trade-higher-post-q1\/"},"modified":"2023-05-24T07:32:11","modified_gmt":"2023-05-24T11:32:11","slug":"american-eagle-outfitters-stock-to-likely-trade-higher-post-q1","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=13059","title":{"rendered":"American Eagle Outfitters Stock To Likely Trade Higher Post Q1"},"content":{"rendered":"
\n

American Eagle Outfitters (NYSE: AEO), which sells men\u2019s and women\u2019s apparel and accessories under the American Eagle, Tailgate, Todd Snyder, and Aerie brands, is scheduled to report its fiscal first-quarter results on Wednesday, May 24. AEO\u2019s gross margins sharply declined to 35% in FY\u201922 from 39.8% in FY\u201921, driven by inflationary pressures impacting the industry. There is a link between these problems and inflation, which has curbed consumer spending and pushed up freight costs for the company, as well as supply chain challenges. Although the Aerie brand has grown despite the macroeconomic environment, its namesake brand has struggled with tough comparisons to its post-pandemic recovery. However, that pressure seems to have eased a little in the fourth quarter as its inventories rose at a slower pace and its gross margin expanded 150 basis points year-over-year (y-o-y). It was encouraging to see AEO\u2019s gross margin hold steady in Q4 since it is still heavily reliant on markdowns to boost sales and reduce inventories. We expect the company stock to be pressured in the short term but the company\u2019s social media activities, e-commerce growth, lack of debt, and focus on Aerie will likely give the business greater flexibility.<\/p>\n

For the year 2023, AEO expects flat to low single-digit percentage revenue growth from 2022. Given the company notched $5.01 billion in revenue in 2022, even mild growth suggests an upside to the $5.1 billion consensus. It also forecasts its 2023 operating income to land in the $270 million to $310 million range, better than the $269 million in 2022. That said, lower cotton prices and freight costs compared to the beginning of 2022 should likely help AEO stabilize expenses in FY 2023. Overall, AEO\u2019s success hinges on revitalizing its namesake brand with fresh products and aggressively expanding Aerie\u2019s banner.<\/p>\n

Our forecast indicates that American Eagle Outfitters
\n AEO
\n <\/fbs-ticker>\u2019 valuation is around $15 a share, which is 20% higher than the current market price. Look at our interactive dashboard analysis of American Eagle Outfitters Earnings Preview:<\/strong> What To Expect in Q1? <\/strong>for more details.<\/p>\n

<\/fbs-ad><\/p>\n

1) Revenues expected to be slightly above consensus estimates<\/strong><\/p>\n

Trefis estimates AEO\u2019s FQ1 2023 revenues to be $1.09 Bil, slightly above the consensus estimate. In Q4, the apparel retailer\u2019s revenue declined 1% y-o-y to $1.5 billion. Aerie brand rose 8% to $464 million and the American Eagle core brand fell a similar 8% y-o-y in Q4. Additionally, inventory levels were trimmed to $585 million, down from $798 million at the close of Q3 and up only 6% from Q4 2021. For the full year 2023, we expect American Eagle Outfitters\u2019 revenues to grow 2.3% y-o-y to $5.1 billion.<\/p>\n

(2) EPS likely to beat consensus estimates comfortably<\/strong><\/p>\n

AEO\u2019s FQ1 2023 earnings per share is expected to be 18 cents per Trefis analysis, comfortably beating the consensus estimate. AEO\u2019s adjusted fourth-quarter earnings per share came in at 37 cents, up 6% y-o-y.<\/p>\n

(3) Stock price estimate higher than the current market price<\/strong><\/p>\n

Going by our American Eagle Outfitters\u2019 Valuation<\/strong>, with an EPS estimate of around $1.14 and a P\/E multiple of 13.4x in fiscal 2023, this translates into a price of around $15, which is almost 20% higher than the current market price.<\/p>\n

It is helpful to see how its peers stack up. AEO Peers shows how American Eagle Outfitters\u2019 stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.<\/p>\n

What if you\u2019re looking for a high-performance portfolio with a low downside instead? Here\u2019s a reinforced value portfolio<\/strong> that has beaten the market consistently while limiting losses during periods of sharp market declines.<\/p>\n

Invest with Trefis <\/strong>Market Beating Portfolios<\/strong><\/p>\n

See all Trefis <\/strong>Price Estimates<\/strong><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

American Eagle Outfitters (NYSE: AEO), which sells men\u2019s and women\u2019s apparel and accessories under the American Eagle, Tailgate, Todd Snyder, and Aerie brands, is scheduled to report its fiscal first-quarter results on Wednesday, May 24. AEO\u2019s gross margins sharply declined to 35% in FY\u201922 from 39.8% in FY\u201921, driven by inflationary pressures impacting the industry. […]<\/p>\n","protected":false},"author":1,"featured_media":13060,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-13059","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured"],"yoast_head":"\nAmerican Eagle Outfitters Stock To Likely Trade Higher Post Q1 | iFintechWorld<\/title>\n<meta name=\"description\" content=\"American Eagle Outfitters (NYSE: AEO), which sells men\u2019s and women\u2019s apparel and accessories under the American Eagle, Tailgate, Todd Snyder, and Aerie\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=13059\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" 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