B. Riley Downgrades American Eagle Outfitters Inc.(AEO:NYE) to a Neutral rating

STA Research
by: STA Research
American Eagle Outfitters Inc. stock

B. Riley Downgrades American Eagle Outfitters Inc. to a Neutral rating and lowers the target price to $13 from $22 on the company’s stock.

Based on the American Eagle Outfitters Inc stock forecasts from 12 analysts, the average analyst target price for American Eagle Outfitters Inc is USD 25.11 over the next 12 months. American Eagle Outfitters Inc’s average analyst rating is Buy . Stock Target Advisor’s own stock analysis of American Eagle Outfitters Inc is Neutral, which is based on 4 positive signals and 4 negative signals. At the last closing, American Eagle Outfitters Inc’s stock price was USD 11.86American Eagle Outfitters Inc’s stock price has changed by -4.74% over the past week, -15.95% over the past month and -65.86% over the last year.

American Eagle Outfitters, Inc. operates as a specialty retailer that provides clothing, accessories, and personal care products under the American Eagle and Aerie brands. The company provides jeans, and specialty apparel and accessories for women and men; and intimates, apparel, activewear, and swim collections, as well as personal care products for women. It also offers graphic tees and other clothing products under the Tailgate brand name; and menswear products under the Todd Snyder New York brand name. As of January 29, 2022, the company operated 880 American Eagle stores, 244 Aerie brand stand-alone stores, and five Todd Snyder stores in the United States, Canada, Mexico, and Hong Kong. It also ships to 81 countries through its Websites; and offers its merchandise at 260 locations operated by licensees in 28 countries, as well as provides products through its Websites ae.com, aerie.com, and toddsnyder.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.

What we like:

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Underpriced on free cash flow basis

The stock is trading low compared to its peers on a price to free cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Superior Revenue Growth

This stock has shown top quartile revenue growth in the previous 5 years compared to its sector.

What we don’t like:

High volatility

The total returns for this company are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Below median total returns

The company has under performed its peers on annual average total returns in the past 5 years.

Overpriced on cashflow basis

The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Poor return on equity

The company management has delivered below median return on equity in the most recent 4 quarters compared to its peers.

Leave a Reply

Your email address will not be published.