AEO  American Eagle Outfitters Inc.

Exchange

NYSE

Sector

Consumer Services

Industry

Clothing/Shoe/Accessory Stores

Market Cap.

2.77B

Vuru Grade

55.25/100

Current Price

$15.25
+0.49 (+3.32%)

Growth Price

$11.35
Overvalued by 25.58%

Stability Price

$25.51
Undervalued by 67.27%

Company Metrics

  • P/E 11.84
  • P/S 0.74
  • P/B 2.29
  • EPS 1.29
  • Cash ROIC 18.77%
  • Cash Ratio 0.56
  • Dividend 0.5 / 3.24%
  • Avg. Vol. 5.02M
  • Shares 181.64M
  • Market Cap. 2.77B

Company Description

American Eagle Outfitters, Inc. operates as an apparel and accessories retailer in the United States and Canada. The company offers denim wear, sweaters, graphic T-shirts, fleece, outerwear, and accessories under the American Eagle Outfitters brand name targeting 15 to 25 year old men and women; and clothing and accessories for kid's ages 2 to 10 through online under the 77kids by american eagle b... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

The 4 Biggest Opportunities for American Eagle Outfitters
Motley Fool - Dec 13, 2016
American Eagle Outfitters (NYSE:AEO) has rallied about 12% this year, outperforming the S&P 500's 10% gain and the Dow Jones U.S.
American Eagle Outfitters: Shouldn't Better Performance Get A Premium? - Seeking Alpha
7 Men's Winterwear Essentials From American Eagle Outfitters - NME.com
Here's Why American Eagle Outfitters Shares Are Plunging
Fortune - Nov 30, 2016
American Eagle Outfitters (aeo, -0.83%) might not have the Midas Touch among teen retailers after all. Shares plunged as much as 15% on Wednesday after giving a weak holiday-quarter sales forecast that disappointed Wall Street and suggested the chain ...
Why American Eagle Outfitters Just Got Punished Today - Motley Fool
American Eagle Outfitters' (AEO) CEO Jay Schottenstein on Q3 2016 Results ... - Seeking Alpha
Banana Republic Factory Store, American Eagle Outfitters appear to be among ...
Virginian-Pilot - Feb 8, 2017
26 on America's Bid Network, a website administered by the North America Procurement Council. The American Eagle Outfitters, called store #2417, is described as about 6,500 square feet, according to a Jan. 27 posting by Go Green Construction Inc., ...
American Eagle Outfitters Inc. (AEO) Moves Higher on Volume Spike for February 24
Equities.com - Feb 24, 2017
American Eagle Outfitters Inc. (AEO) traded on unusually high volume on Feb. 24, as the stock gained 3.32% to close at $15.25.
The American Eagle Outfitters Inc. (AEO) Raised to “Hold” by The Zacks ... - DailyQuint
American Eagle Outfitters Inc. (AEO) Position Increased by the Gateway ... - Petro Global News 24
American Eagle Outfitters employee claims store discriminating against him ...
Southeast Texas Record - Feb 17, 2017
GALVESTON - A store manager for a Pittsburgh-based clothing and accessories retailer has brought a lawsuit alleging discrimination based on his race and medical condition.
Impact of Brokerage Rating on American Eagle Outfitters, Inc.(AEO) - Highland Mirror
Stock in the News: American Eagle Outfitters, Inc. (NYSE:AEO) - TopChronicle
A 43% Return On An Unchanged Stock
Seeking Alpha - Feb 19, 2017
At first glance, shares of specialty retailer American Eagle Outfitters (NYSE:AEO) might seem an odd choice for this. Closer examination shows it's near perfect right now.
American Eagle Outfitters (AEO): Moving Average Crossover Alert January 30, 2017
Zacks.com - Jan 30, 2017
American Eagle Outfitters, Inc. (AEO - Free Report) could be a stock to avoid from a technical perspective, as the firm is seeing unfavorable trends on the moving average crossover front.
American Eagle Outfitters, Inc. (AEO) Stake Decreased by Hodges Capital ... - Sports Perspectives
American Eagle reaches $14.5M settlement in spam text lawsuit, blames ...
Legal News Line - Feb 8, 2017
NEW YORK (Legal Newsline) - Facing a class action lawsuit involving alleged spam text messages, American Eagle Outfitters has agreed to settle the proposed lawsuit by paying a large settlement to the plaintiffs.
Just the Facts on American Eagle Outfitters, Inc. (AEO) - StockNewsJournal
Shares of American Eagle Outfitters, Inc. (AEO) Sees Large Inflow of Net Money ... - Highland Mirror
Traders Secrets on Westinghouse Air Brake Technologies Corporation (WAB ...
StockNewsJournal - Feb 22, 2017
American Eagle Outfitters, Inc. (NYSE:AEO), at its latest closing price of $15.57, it has a price-to-book ratio of 2.37, compared to an industry average at 3.87.
American Eagle Outfitters, Inc. (AEO): What's the Story?
StockNewsJournal - Feb 23, 2017
American Eagle Outfitters, Inc. (AEO) is an interesting player in the Services space, with a focus on Apparel Stores. The stock has been active on the tape, currently trading at $15.44, down from yesterday's close by -0.83%.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for AEO to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate AEO's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$15.25 Current Price

$11.35 Growth Price (DCF)

Overvalued by 25.58%


Growth Rate Assumed by Market: 9.03%


Future Free Cash Flow Growth Rate: -4.5%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$25.51 Stability Price (EPV)

Undervalued by 67.27%


Discount Rate: 15.0%

$0.89 NCA Price

Overvalued by 94.13%

$13.37 Book Price

Overvalued by 12.32%


Varying Cash Return on Invested Capital over the past 5 years

AEO has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. However, there is a substantial variation in their Cash ROIC from year-to-year. This company may have unreliable free cash flow or operates in a business where invested capital costs increase substantially on a sporadic basis. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

AEO has created $18.77 of cash for every $100 invested.
Figures in USD. Fiscal year ends in January
20122013201420152016
Free Cash Flow 104.93M 379.99M -55.48M 92.16M 186.28M
divided by
Invested Capital 800.36M 689.16M 849.75M 827.12M 888.50M
Cash ROIC 13.11% 55.14% -6.53% 11.14% 20.97%

Inconsistent Return on Equity over the past 5 years

AEO has generated adequate returns with capital that shareholders have invested. However, there has been some inconsistency from year-to-year. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

AEO has generated $12.92 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in January
20122013201420152016
Net Income 151.71M 232.11M 82.98M 80.32M 218.14M
divided by
Stockholders' Equity 1.42B 1.22B 1.17B 1.14B 1.05B
Return on Equity 10.71% 19.01% 7.12% 7.05% 20.75%

Excellent Business Performance over the past 10 years

AEO has been able to maintain profitability in good times and bad. This could mean AEO has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

AEO has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in January
2007200820092010201120122013201420152016
Free Cash Flow 523.33M 213.86M 36.86M 259.04M 296.90M 104.93M 379.99M -55.48M 92.16M 186.28M

Good Balance Sheet

AEO's Total Assets double Total Liabilities. Its financial position is adequate. Remember to check Shareholders' Equity to see if it's stable or growing. It's one of the best measures of whether a company is creating value for shareholders.
Figures in USD. Fiscal year ends in January
2007200820092010201120122013201420152016
Cash 827.11M 619.94M 483.85M 698.64M 734.70M 745.04M 630.99M 428.94M 410.70M 260.07M
Current Assets 1.20B 1.02B 925.36M 1.17B 1.17B 1.29B 1.14B 923.56M 890.51M 723.38M
Total Assets 1.99B 1.87B 1.96B 2.14B 1.88B 1.95B 1.76B 1.69B 1.70B 1.61B
Current Liabilities 460.46M 376.18M 401.76M 408.96M 387.84M 405.40M 435.90M 415.48M 459.09M 463.68M
Total Liabilities 570.17M 527.22M 554.65M 559.63M 528.93M 533.95M 534.87M 527.99M 557.16M 560.87M
Stockholder' Equity 1.42B 1.34B 1.41B 1.58B 1.35B 1.42B 1.22B 1.17B 1.14B 1.05B
Current Ratio 2.60 2.71 2.30 2.85 3.03 3.18 2.62 2.22 1.94 1.56
TL-to-TA 0.29 0.28 0.28 0.26 0.28 0.27 0.30 0.31 0.33 0.35

Low or No Reinvestment of Profits over the past 10 years

AEO has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to AEO operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in January
2007200820092010201120122013201420152016
Retained Earnings 1.30B 1.60B 1.69B 1.76B 1.71B 1.77B 1.55B 1.57B 1.54B 1.66B
Retained Earnings Growth - 22.99% 5.77% 4.13% -2.95% 3.48% -12.33% 1.08% -1.71% 7.53%

Competitive Industry over the past 10 years

AEO is likely operating in an industry with medium to low barriers to entry. This may mean that AEO doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that AEO invests heavily in R&D and Sales, General & Administrative expenses.

Only $6.60 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in January
2007200820092010201120122013201420152016
Net Income 387.36M 400.02M 179.06M 169.02M 140.65M 151.71M 232.11M 82.98M 80.32M 218.14M
divided by
Revenue 2.79B 3.06B 2.99B 2.99B 2.97B 3.16B 3.48B 3.31B 3.28B 3.52B
Net Profit Margin 13.86% 13.09% 5.99% 5.65% 4.74% 4.80% 6.68% 2.51% 2.45% 6.19%

Varying Pricing Power over the past 10 years

AEO has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$45.79 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in January
2007200820092010201120122013201420152016
Gross Profit 1.34B 1.42B 1.17B 1.16B 1.17B 3.16B 1.39B 1.11B 1.15B 1.30B
divided by
Revenue 2.79B 3.06B 2.99B 2.99B 2.97B 3.16B 3.48B 3.31B 3.28B 3.52B
Gross Margin 47.97% 46.58% 39.28% 38.72% 39.46% 100.00% 40.00% 33.70% 35.17% 36.99%

High Capital Intensity over the past 10 years

AEO spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

125.57% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in January
2007200820092010201120122013201420152016
Capital Expenditure 225.94M 250.41M 265.34M 127.42M 84.26M 134.32M 95.06M 285.33M 246.27M 155.64M
divided by
Net Income 387.36M 400.02M 179.06M 169.02M 140.65M 151.71M 232.11M 82.98M 80.32M 218.14M
Capital Expenditure Ratio 58.33% 62.60% 148.18% 75.39% 59.91% 88.54% 40.96% 343.85% 306.60% 71.35%

Very Strong Dividend History over the past 10 years

AEO has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests AEO is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in January
2007200820092010201120122013201420152016
Dividend Paid 61.52M 80.80M 82.39M 82.99M 183.17M 85.59M 403.49M 72.28M 97.22M 97.24M
divided by
Shares Outstanding 228.38M 220.28M 207.58M 209.51M 201.82M 196.31M 200.67M 194.48M 195.14M 196.24M
Dividend Paid Per Share 0.27 0.37 0.40 0.40 0.91 0.44 2.01 0.37 0.50 0.50
Price at Year End 17.66 8.09 15.40 14.29 15.29 19.85 14.57 13.89 15.63 15.17
Dividend Yield 1.53% 4.53% 2.58% 2.77% 5.94% 2.20% 13.80% 2.68% 3.19% 3.27%

History of Stock Buybacks over the past 10 years

AEO has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in January
2007200820092010201120122013201420152016
Shares Outstanding 228.38M 220.28M 207.58M 209.51M 201.82M 196.31M 200.67M 194.48M 195.14M 196.24M
Stock Bought Back - 3.68% 6.12% -0.92% 3.81% 2.80% -2.17% 3.18% -0.34% -0.56%
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Discussion
Sort By:
1
Posted by EZshares  (on April 4, 2012)
any hot stock out there to by today
1
Posted by TheGeneralist  (on March 30, 2012)
Retail. Retail. Retail. So Hot and Cold.

I find these stocks really hard to gauge. As a consumer, I've watched as AEO has gone down market and it shows in the quality of their clothing. no wonder margins have started shrinking...
1
Posted by gsanta111  (on March 31, 2012)
I treat retail like commodities. It's all about the lowest cost and highest brand.
1
Posted by TheGeneralist  (on April 1, 2012)
That makes sense. Any recommendations?