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Is It Time To Buy American Eagle Outfitters Inc (AEO)?

Ajay Mannan

American Eagle Outfitters Inc (NYSE:AEO), a specialty retail company based in United States, led the NYSE gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at AEO’s outlook and value based on the most recent financial data to see if the opportunity still exists. Check out our latest analysis for American Eagle Outfitters

What’s the opportunity in AEO?

Good news, investors! AEO is still a bargain right now. According to my valuation, the intrinsic value for the stock is $16.66, but it is currently trading at $12.97 on the share market, meaning that there is still an opportunity to buy now. However, given that AEO’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of AEO look like?

NYSE:AEO Future Profit Oct 20th 17

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at AEO future expectations. AEO’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since AEO is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on AEO for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy AEO. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on American Eagle Outfitters. You can find everything you need to know about AEO in the latest infographic research report. If you are no longer interested in American Eagle Outfitters, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.