American Eagle (AEO) AI Stock Analysis

• Market Cap: $1.90B
• Dividend Yield: 4.48%
• Average Volume (3M): 7.67M
• Price to Earnings (P/E): 6.6
• Beta (1Y): 0.84
• Revenue Growth: 1.27%
• EPS Growth: 96.32%
• Country: US
• Employees: 9,000
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Apparel - Retail
• EPS (TTM): 0.53
• Shares Outstanding: 172,514,100
• 10 Day Avg. Volume: 5,471,077
• 30 Day Avg. Volume: 7,666,948
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.21
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.02
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $13.82
• Price Target Upside: 21.76% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

American Eagle Outfitters is a stable entity in the retail sector, buoyed by strong financial performance and solid cash flow generation. Despite a challenging start to 2025, the company's strategic initiatives and attractive valuation metrics, including a low P/E ratio and high dividend yield, present a compelling investment case. However, technical analysis indicates potential short-term pressures, and earnings call insights suggest some near-term challenges. Overall, the stock remains a solid mid-term investment opportunity with strong fundamentals.

Positive Factors

Marketing Investment

Higher marketing investment focusing on digital and influencers should help drive demand.

Supply Chain Management

The nimbleness of the supply chain allows China sourcing exposure to decrease significantly.

Negative Factors

Price Objective Adjustment

Lowering of the price objective to $13 reflects worsening fundamentals.

Profitability Challenges

Management guided FY25 operating income to be significantly below the Street expectations, indicating potential challenges in achieving previous growth targets.

Sales Performance

Sales have slowed at both brands, with a better performance at Aerie than American Eagle.

American Eagle Business Overview & Revenue Model

Company Description

American Eagle Outfitters, Inc. (AEO) is a leading global specialty retailer offering high-quality, on-trend clothing, accessories, and personal care products at affordable prices. The company operates two primary brands, American Eagle and Aerie, targeting a diverse customer base with a focus on youth and young adults. Through a combination of physical stores and a robust e-commerce presence, AEO provides a seamless shopping experience and strives to build long-lasting customer relationships.

How the Company Makes Money

American Eagle Outfitters generates revenue primarily through the sale of apparel, accessories, and personal care products under its American Eagle and Aerie brands. The company operates a substantial number of retail stores across various regions, which serve as a significant revenue stream. Additionally, AEO has a strong online presence, with its e-commerce platform contributing significantly to its overall sales. The company's revenue is further bolstered by strategic partnerships and collaborations, exclusive product offerings, and marketing initiatives aimed at enhancing brand loyalty. AEO's focus on maintaining a diverse and appealing product lineup helps drive customer engagement and repeat purchases, thus sustaining its earnings.

American Eagle Financial Statement Overview

Summary

American Eagle demonstrates a solid financial performance with consistent revenue growth and strong cash flow generation. The company maintains reasonable leverage, although its equity ratio suggests some reliance on debt. The income statement reveals improved profit margins, while the cash flow statement underscores the company's ability to generate free cash flow effectively. Despite fluctuations in net income historically, the overall trajectory remains positive, making American Eagle a stable entity in the retail sector.

Income Statement

American Eagle's income statement shows robust revenue growth with a 1.27% increase from 2024 to 2025. The gross profit margin is a strong 39.18%, and the net profit margin has improved to 6.18%. Both EBIT and EBITDA margins have shown improvement, indicating enhanced operational efficiency. However, the net income has fluctuated in prior years, which could be a concern for stability.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.82, showing a balanced use of debt and equity financing. The return on equity is at 18.64%, which is a positive indicator of profitability. However, the equity ratio stands at 46.13%, suggesting a moderate reliance on liabilities. Overall, the company's leverage is manageable, but it could increase the risk during periods of financial stress.

Cash Flow

The cash flow statement highlights a strong free cash flow of $476.8 million, with a free cash flow growth rate of 17.34% from the previous year. The operating cash flow to net income ratio is 1.45, indicating good cash generation relative to net income. The free cash flow to net income ratio of 1.45 further underscores the company's solid cash position. This strong cash flow performance provides a cushion against financial volatility.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
5.33B	5.26B	4.99B	5.01B	3.76B
	Gross Profit
2.09B	2.02B	1.75B	1.99B	1.15B
	EBIT
427.30M	222.72M	247.05M	591.07M	288.31M
	EBITDA
665.39M	477.02M	404.98M	756.43M	-104.73M
	Net Income Common Stockholders
329.38M	170.04M	125.14M	419.63M	-209.27M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
358.96M	454.09M	170.21M	434.77M	850.48M
	Total Assets
3.83B	3.56B	3.42B	3.79B	3.43B
	Total Debt
1.45B	1.19B	1.37B	1.81B	1.80B
	Net Debt
1.14B	831.54M	1.20B	1.37B	952.18M
	Total Liabilities
2.06B	1.82B	1.82B	2.36B	2.35B
	Stockholders Equity
1.77B	1.74B	1.60B	1.42B	1.09B
Cash Flow		Free Cash Flow
476.80M	406.27M	145.92M	69.82M	74.52M
	Operating Cash Flow
476.80M	580.71M	406.30M	303.67M	202.50M
	Investing Cash Flow
-217.51M	-287.43M	-261.38M	-594.60M	-73.94M
	Financing Cash Flow
-301.91M	-109.47M	-407.89M	-125.20M	359.91M

American Eagle Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.35
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEO, the sentiment is Positive. The current price of 11.35 is above the 20-day moving average (MA) of 10.86, above the 50-day MA of 11.35, and below the 200-day MA of 16.59, indicating a neutral trend. The MACD of -0.08 indicates Negative momentum. The RSI at 53.21 is Neutral, neither overbought nor oversold. The STOCH value of 78.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AEO.

American Eagle Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FDP	76 Outperform	$1.60B	10.92	7.51%	3.18%	-0.64%	―
AEO	73 Outperform	$1.90B	6.62	18.80%	4.48%	1.27%	96.32%
RVLV	69 Neutral	$1.35B	27.39	11.97%	―	9.09%	106.50%
WWW	63 Neutral	$1.15B	24.57	15.57%	2.81%	-13.05%	―
Sector *	61 Neutral	$6.59B	11.77	3.06%	3.98%	2.56%	-20.85%
VSCO	61 Neutral	$1.56B	9.80	31.30%	―	0.76%	49.95%
FL	56 Neutral	$1.11B	95.28	0.62%	―	-2.20%	―

American Eagle Corporate Events

American Eagle Boosts Q4 Profit Outlook and Returns

American Eagle Outfitters has announced an improved profit outlook for the fourth quarter of 2024, driven by better-than-expected holiday sales and growth across its brands, including American Eagle and Aerie. The company has revised its operating profit expectations to approximately $135 million, up from previous guidance, and has also reported significant shareholder returns through share repurchases and dividends.