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American Eagle Outfitters Inc (AEO)AEO
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Upturn Advisory Summary
11/29/2024: AEO (3-star) is currently NOT-A-BUY. Pass it for now.
Analysis of Past Performance
Type: Stock | Upturn Star Rating | Today’s Advisory: PASS |
Historic Profit: 13.71% | Upturn Advisory Performance 3 | Avg. Invested days: 38 |
Profits based on simulation | Stock Returns Performance 2 | Last Close 11/29/2024 |
Type: Stock | Today’s Advisory: PASS |
Historic Profit: 13.71% | Avg. Invested days: 38 |
Upturn Star Rating | Stock Returns Performance 2 |
Profits based on simulation Last Close 11/29/2024 | Upturn Advisory Performance 3 |
Key Highlights
Company Size Mid-Cap Stock | Market Capitalization 3.70B USD |
Price to earnings Ratio 15.39 | 1Y Target Price 23.5 |
Dividends yield (FY) 2.60% | Basic EPS (TTM) 1.25 |
Volume (30-day avg) 4197909 | Beta 1.5 |
52 Weeks Range 16.88 - 25.98 | Updated Date 12/1/2024 |
Company Size Mid-Cap Stock | Market Capitalization 3.70B USD | Price to earnings Ratio 15.39 | 1Y Target Price 23.5 |
Dividends yield (FY) 2.60% | Basic EPS (TTM) 1.25 | Volume (30-day avg) 4197909 | Beta 1.5 |
52 Weeks Range 16.88 - 25.98 | Updated Date 12/1/2024 |
Earnings Date
Report Date - | When - |
Estimate - | Actual - |
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin 4.58% | Operating Margin (TTM) 7.83% |
Management Effectiveness
Return on Assets (TTM) 8.04% | Return on Equity (TTM) 14.73% |
Revenue by Products
Revenue by Products - Current and Previous Year
Revenue by Geography
Revenue by Geography - Current and Previous Year
Valuation
Trailing PE 15.39 | Forward PE 9.88 |
Enterprise Value 4826491394 | Price to Sales(TTM) 0.68 |
Enterprise Value to Revenue 0.89 | Enterprise Value to EBITDA 7.27 |
Shares Outstanding 192064000 | Shares Floating 175928324 |
Percent Insiders 6.1 | Percent Institutions 101.55 |
Trailing PE 15.39 | Forward PE 9.88 | Enterprise Value 4826491394 | Price to Sales(TTM) 0.68 |
Enterprise Value to Revenue 0.89 | Enterprise Value to EBITDA 7.27 | Shares Outstanding 192064000 | Shares Floating 175928324 |
Percent Insiders 6.1 | Percent Institutions 101.55 |
Analyst Ratings
Rating 3.2 | Target Price 17.14 | Buy 2 |
Strong Buy 1 | Hold 6 | Sell - |
Strong Sell 1 |
Rating 3.2 | Target Price 17.14 | Buy 2 | Strong Buy 1 |
Hold 6 | Sell - | Strong Sell 1 |
AI Summarization
American Eagle Outfitters Inc.: A Comprehensive Analysis
Company Profile:
Detailed History and Background:
- Founded in 1977 in Michigan, American Eagle Outfitters Inc. (AEO) initially specialized in jeans and casual clothing.
- Acquired the Aerie brand in 2006, focusing on lingerie and intimates.
- Currently operates over 900 stores in the US and Canada under the AEO and Aerie brands.
- Emphasizes inclusivity and body positivity in its marketing and product lines.
Core Business Areas:
- Retailing clothing and accessories for men and women under the AEO and Aerie brands.
- Online sales through their respective websites.
- Wholesale distribution to select retailers.
Leadership and Corporate Structure:
- Jay Schottenstein, Executive Chairman and Chief Executive Officer.
- Jennifer Foyle, President - Executive Vice President, Chief Creative Officer.
- Michael Rempell, Chief Operating Officer.
- Board of Directors comprises experienced individuals from diverse backgrounds.
Top Products and Market Share:
- Top Products: Jeans, t-shirts, graphic tees, underwear, bras, loungewear, activewear.
- Market Share:
- Holds approximately 4% of the teen apparel market in the US.
- Aerie is the second-largest intimates retailer in the US after Victoria's Secret.
- Comparison:
- Competes with Abercrombie & Fitch, Hollister, Gap Inc., and fast-fashion retailers like H&M and Zara.
- Aerie's closest competitor is Victoria's Secret, offering a similar product range but with a more body-positive approach.
Total Addressable Market:
- The global apparel market is valued at over $3 trillion.
- The US teen apparel market alone is estimated to be worth $50 billion.
- This vast market offers significant growth potential for American Eagle Outfitters.
Financial Performance:
Recent Performance (2022):
- Revenue: $4.24 billion
- Net Income: $274.5 million
- Profit Margin: 6.5%
- EPS: $2.26
- Year-over-year Comparison:
- Revenue increased by 10% compared to 2021.
- Net income increased by 34% compared to 2021.
- EPS increased by 37% compared to 2021.
- Cash Flow and Balance Sheet:
- AEO has a healthy cash flow position with $301.7 million in operating cash flow in 2022.
- The company maintains a strong balance sheet with low debt levels.
Dividends and Shareholder Returns:
- Dividend History:
- AEO has a history of paying dividends, although it suspended them during the pandemic.
- The company resumed dividend payments in 2022 with a current annual dividend yield of 0.6%.
- Payout ratio is moderate at around 25%.
- Shareholder Returns:
- AEO stock has provided strong returns to investors in recent years.
- Over the past year, the stock has returned over 40%.
- Over the past five years, the stock has returned over 150%.
Growth Trajectory:
- Historical Growth:
- AEO has experienced steady growth in recent years, with revenue increasing by an average of 7% annually over the past five years.
- The company's e-commerce business has been a key driver of growth.
- Future Projections:
- AEO is expected to continue growing in the coming years, driven by strong demand for its products and expansion plans.
- Analysts predict revenue growth of around 5% annually over the next five years.
- Recent Initiatives:
- AEO is investing in its e-commerce platform and expanding its international presence.
- The company is also focusing on developing new product categories and expanding its Aerie brand.
Market Dynamics:
- Industry Trends:
- The apparel industry is becoming increasingly competitive, with fast-fashion retailers and online brands gaining market share.
- Sustainability and ethical sourcing are becoming increasingly important to consumers.
- The rise of social media influencers is impacting consumer purchasing decisions.
- Company Positioning:
- AEO is well-positioned to compete in this dynamic market due to its strong brand recognition, loyal customer base, and focus on innovation.
- The company's commitment to inclusivity and sustainability resonates with younger consumers.
Competitors:
- Key competitors include Abercrombie & Fitch (ANF), Gap Inc. (GPS),
- Victoria's Secret (VSCO), Hollister (part of ANF), H&M (HNNMY), and Zara (IDEX).
- AEO holds a market share advantage over most competitors, except for Victoria's Secret in the intimates segment.
- AEO's focus on body positivity and Aerie's successful marketing strategy give them an edge over Victoria's Secret.
Potential Challenges and Opportunities:
Challenges:
- Intense competition from both traditional and online retailers.
- Rising production costs and supply chain disruptions.
- Changing consumer preferences and evolving fashion trends.
Opportunities:
- Expanding into new markets, both domestically and internationally.
- Introducing new product categories and expanding the Aerie brand.
- Leveraging technology to enhance the customer experience and improve operational efficiency.
Recent Acquisitions:
- In 2022, AEO acquired Quiet Platforms, a technology platform that enhances the customer shopping experience.
AI-Based Fundamental Rating:
Rating: 8/10
Justification:
- AEO has a strong financial position with consistent revenue growth, healthy cash flow, and low debt levels.
- The company is well-positioned to compete in the dynamic apparel market with its strong brand recognition, loyal customer base, and focus on innovation.
- AEO's commitment to inclusivity and sustainability resonates with younger consumers and offers a competitive advantage.
- However, the company faces challenges from intense competition, rising costs, and changing consumer preferences.
Sources:
- American Eagle Outfitters Inc. Investor Relations website
- SEC filings
- Yahoo Finance
- MarketWatch
Disclaimer:
This information is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.
Note: This analysis is based on publicly available information as of November 2023. Data and insights may change after this date.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About American Eagle Outfitters Inc
Exchange | NYSE | Headquaters | Pittsburgh, PA, United States |
IPO Launch date | 1994-04-13 | Executive Chairman of the Board & CEO | Mr. Jay L. Schottenstein |
Sector | Consumer Cyclical | Website | https://www.aeo-inc.com |
Industry | Apparel Retail | Full time employees | 10300 |
Headquaters | Pittsburgh, PA, United States | ||
Executive Chairman of the Board & CEO | Mr. Jay L. Schottenstein | ||
Website | https://www.aeo-inc.com | ||
Website | https://www.aeo-inc.com | ||
Full time employees | 10300 |
American Eagle Outfitters, Inc. operates as a multi-brand specialty retailer in the United States and internationally. The company provides jeans, apparel and accessories, and personal care products for women and men under the American Eagle brand; and intimates, apparel, activewear, and swim collections under the Aerie and OFFLINE by Aerie brands. It also offers menswear products under the Todd Snyder New York brand; and fashion clothing and accessories under the Unsubscribed brand. The company sells its products through own and licensed retail stores; concession-based shops-within-shops; and digital channels, such as www.ae.com, www.aerie.com, www.toddsnyder.com, and www.unsubscribed.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.
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