AEO  American Eagle Outfitters Inc.

Exchange

NYSE

Sector

Consumer Services

Industry

Clothing/Shoe/Accessory Stores

Market Cap.

2.41B

Vuru Grade

36.70/100

Current Price

$13.61
+0.105 (+0.778%)

Growth Price

$13.68
Fairly valued

Stability Price

$11.75
Overvalued by 13.64%

Company Metrics

  • P/E 13.968
  • P/S 0.656
  • P/B 2.125
  • EPS 0.974
  • Cash ROIC 20.59%
  • Cash Ratio 0.77
  • Dividend 0.5 / 3.7%
  • Avg. Vol. 4.40M
  • Shares 177.14M
  • Market Cap. 2.41B

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

American Eagle Outfitters Concerns Are Misguided
Seeking Alpha - Oct 16, 2017
Growth in revenues has been consistent and analysts expect earnings to grow 9% yearly for the next five years. American Eagle Outfitters' online business continues to grow. American Eagle is one of the top brands among young adults and teenagers.
Analyst's Predictions on American Eagle Outfitters, Inc. (AEO), Steel Dynamics ... - StockNewsJournal
Comparing American Eagle Outfitters, Inc. (AEO) and Ross Stores, Inc. (ROST) - StockNewsGazette
American Eagle: Still The Best Pick In Retail Apparel
Seeking Alpha - Oct 13, 2017
I've held American Eagle Outfitters (AEO) for several months now, and it is my sole holding in non-electronic retail. Despite the stubborness on the stock price, I'm always looking to poke holes in my prior due diligence, but the company still has that ...
Earnings Clues on American Eagle Outfitters, Inc. (AEO), CONSOL Energy Inc ...
StockNewsJournal - 9 hours ago
American Eagle Outfitters, Inc. (AEO) have shown a high EPS growth of 5.30% in the last 5 years and has earnings rose of 6.30% yoy.
American Eagle Outfitters, Inc. (AEO) added to 29 new portfolios - Post Analyst
American Eagle Outfitters Ne (AEO) Shareholder Mackay Shields LLC Has ... - BZ Weekly
American Eagle Following A Familiar Pattern
Seeking Alpha - Sep 25, 2017
A few years ago, one of the big worries around companies like American Eagle, Abercrombie & Fitch (NYSE:ANF), Urban Outfitters (NASDAQ:URBN) and the like was whether “fast fashion” retailers like H&M (OTCPK:HNNMY) were going to beat them up for ...
American Eagle Outfitters Is Trying to Fly Higher - TheStreet.com
New Loyalty Program at American Eagle Outfitters Targets Millennial Audience - Loyalty360
American Eagle Outfitters in new loyalty offerings
Chain Store Age - Sep 26, 2017
"AEO Connected rewards brand advocates and encourages greater customer engagement, beyond just transactional,” said Kyle Andrew, chief marketing officer, American Eagle Outfitters. “The new platform provides flexibility to evolve with the changing ...
American Eagle Outfitters Inc. (AEO) Moves Lower on Volume Spike for October 11
Equities.com - Oct 11, 2017
American Eagle Outfitters Inc. (AEO) traded on unusually high volume on Oct. 11, as the stock lost 3.45% to close at $13.14.
Checking the Overall Picture for American Eagle Outfitters, Inc. (AEO) - StockNewsJournal
Do You Own American Eagle Outfitters, Inc. (NYSE:AEO) Shares? - TopChronicle
Why American Eagle (AEO) is Such a Great Value Stock Pick Right Now? October ...
Zacks.com - Oct 11, 2017
Value investing is always a very popular strategy, and for good reason. After all, who doesn't want to find stocks that have low PEs, solid outlooks, and decent dividends?
Price Alert: American Eagle Outfitters Inc (NYSE:AEO) Stock Nears Resistance ...
CML News - 13 hours ago
Price Alert: American Eagle Outfitters Inc (NYSE:AEO) has now crossed into technical strength -- watch the technical oscillators for momentum gaps.
Focusing the Lens in on American Eagle Outfitters (AEO) Shares
The Business Union - 9 hours ago
Needle moving action has been spotted in American Eagle Outfitters (AEO) as shares are moving today on volatility 1.93% or 0.26 from the open.
American Eagle Outfitters Inc Risk Points versus Consumer Staples
CML News - Oct 18, 2017
This is a scatter plot analysis of the critical risk points from the option market for American Eagle Outfitters Inc (NYSE:AEO) compared to its own past and the Consumer Staples ETF.
A Bit Overly Ripe For Owning: American Eagle Outfitters, Inc. (AEO), Intuitive ... - Post Analyst
American Eagle Outfitters, Inc. (AEO) Insider HURD SCOTT M. sold 1901 Shares ... - Economic News
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.

$13.61 Current Price

$13.68 Growth Price (DCF)

Fairly valued


Growth Rate Assumed by Market: -2.01%


Future Free Cash Flow Growth Rate: -1.7%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$11.75 Stability Price (EPV)

Overvalued by 13.64%


Discount Rate: 15.0%

$1.82 NCA Price

Overvalued by 86.59%

$15.53 Book Price

Undervalued by 14.15%


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 $20.59 of cash for every $100 invested.
Figures in USD. Fiscal year ends in January
20132014201520162017
Free Cash Flow 379.99M -55.48M 92.16M 186.28M 202.57M
divided by
Invested Capital 689.16M 849.75M 827.12M 888.50M 910.26M
Cash ROIC 55.14% -6.53% 11.14% 20.97% 22.25%

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 $14.31 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in January
20132014201520162017
Net Income 232.11M 82.98M 80.32M 218.14M 212.45M
divided by
Stockholders' Equity 1.22B 1.17B 1.14B 1.05B 1.20B
Return on Equity 19.01% 7.12% 7.05% 20.75% 17.64%

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
2008200920102011201220132014201520162017
Free Cash Flow 213.86M 36.86M 259.04M 296.90M 104.93M 379.99M -55.48M 92.16M 186.28M 202.57M

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
2008200920102011201220132014201520162017
Cash 619.94M 483.85M 698.64M 734.70M 745.04M 630.99M 428.94M 410.70M 260.07M 378.61M
Current Assets 1.02B 925.36M 1.17B 1.17B 1.29B 1.14B 923.56M 890.51M 723.38M 901.23M
Total Assets 1.87B 1.96B 2.14B 1.88B 1.95B 1.76B 1.69B 1.70B 1.61B 1.78B
Current Liabilities 376.18M 401.76M 408.96M 387.84M 405.40M 435.90M 415.48M 459.09M 463.68M 493.78M
Total Liabilities 527.22M 554.65M 559.63M 528.93M 533.95M 534.87M 527.99M 557.16M 560.87M 578.09M
Stockholder' Equity 1.34B 1.41B 1.58B 1.35B 1.42B 1.22B 1.17B 1.14B 1.05B 1.20B
Current Ratio 2.71 2.30 2.85 3.03 3.18 2.62 2.22 1.94 1.56 1.83
TL-to-TA 0.28 0.28 0.26 0.28 0.27 0.30 0.31 0.33 0.35 0.32

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
2008200920102011201220132014201520162017
Retained Earnings 1.60B 1.69B 1.76B 1.71B 1.77B 1.55B 1.57B 1.54B 1.66B 1.78B
Retained Earnings Growth - 5.77% 4.13% -2.95% 3.48% -12.33% 1.08% -1.71% 7.53% 7.02%

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 $5.80 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in January
2008200920102011201220132014201520162017
Net Income 400.02M 179.06M 169.02M 140.65M 151.71M 232.11M 82.98M 80.32M 218.14M 212.45M
divided by
Revenue 3.06B 2.99B 2.99B 2.97B 3.16B 3.48B 3.31B 3.28B 3.52B 3.61B
Net Profit Margin 13.09% 5.99% 5.65% 4.74% 4.80% 6.68% 2.51% 2.45% 6.19% 5.89%

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.

$44.78 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
2008200920102011201220132014201520162017
Gross Profit 1.42B 1.17B 1.16B 1.17B 3.16B 1.39B 1.11B 1.15B 1.30B 1.37B
divided by
Revenue 3.06B 2.99B 2.99B 2.97B 3.16B 3.48B 3.31B 3.28B 3.52B 3.61B
Gross Margin 46.58% 39.28% 38.72% 39.46% 100.00% 40.00% 33.70% 35.17% 36.99% 37.87%

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.

127.41% 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
2008200920102011201220132014201520162017
Capital Expenditure 250.41M 265.34M 127.42M 84.26M 134.32M 95.06M 285.33M 246.27M 155.64M 163.02M
divided by
Net Income 400.02M 179.06M 169.02M 140.65M 151.71M 232.11M 82.98M 80.32M 218.14M 212.45M
Capital Expenditure Ratio 62.60% 148.18% 75.39% 59.91% 88.54% 40.96% 343.85% 306.60% 71.35% 76.73%

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
2008200920102011201220132014201520162017
Dividend Paid 80.80M 82.39M 82.99M 183.17M 85.59M 403.49M 72.28M 97.22M 97.24M 90.68M
divided by
Shares Outstanding 220.28M 207.58M 209.51M 201.82M 196.31M 200.67M 194.48M 195.14M 196.24M 183.84M
Dividend Paid Per Share 0.37 0.40 0.40 0.91 0.44 2.01 0.37 0.50 0.50 0.49
Price at Year End 8.09 15.40 14.29 15.29 19.85 14.57 13.89 15.63 15.17 13.53
Dividend Yield 4.53% 2.58% 2.77% 5.94% 2.20% 13.80% 2.68% 3.19% 3.27% 3.65%

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
2008200920102011201220132014201520162017
Shares Outstanding 220.28M 207.58M 209.51M 201.82M 196.31M 200.67M 194.48M 195.14M 196.24M 183.84M
Stock Bought Back - 6.12% -0.92% 3.81% 2.80% -2.17% 3.18% -0.34% -0.56% 6.75%
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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?