Will American Eagle Outfitters, Inc.'s (NYSE:AEO) Earnings Grow Over The Next Year?
Based on American Eagle Outfitters, Inc.'s (NYSE:AEO) earnings update in May 2019, analyst consensus outlook appear cautiously subdued, as a 6.9% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 22%. Presently, with latest-twelve-month earnings at US$262m, we should see this growing to US$280m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
View our latest analysis for American Eagle Outfitters
Can we expect American Eagle Outfitters to keep growing?
The 11 analysts covering AEO view its longer term outlook with a positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of AEO's earnings growth over these next few years.
From the current net income level of US$262m and the final forecast of US$325m by 2022, the annual rate of growth for AEO’s earnings is 7.3%. This leads to an EPS of $1.92 in the final year of projections relative to the current EPS of $1.48. Margins are currently sitting at 6.5%, which is expected to expand to 7.0% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For American Eagle Outfitters, I've put together three pertinent aspects you should look at:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is American Eagle Outfitters worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether American Eagle Outfitters is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of American Eagle Outfitters? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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