American Eagle Outfitters (AEO) Suffers a Larger Drop Than the General Market: Key Insights

In the latest trading session, American Eagle Outfitters (AEO) closed at $16.63, marking a -1.42% move from the previous day. This change lagged the S&P 500's 0.33% loss on the day. Elsewhere, the Dow lost 0.7%, while the tech-heavy Nasdaq lost 0.12%.

Shares of the teen clothing retailer witnessed a loss of 1.8% over the previous month, trailing the performance of the Retail-Wholesale sector with its gain of 2.78%, and the S&P 500's gain of 3.87%.

Market participants will be closely following the financial results of American Eagle Outfitters in its upcoming release. The company plans to announce its earnings on September 9, 2026. In that report, analysts expect American Eagle Outfitters to post earnings of $0.21 per share. This would mark a year-over-year decline of 53.33%. Meanwhile, our latest consensus estimate is calling for revenue of $1.37 billion, up 6.48% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.76 per share and revenue of $5.81 billion. These totals would mark changes of +17.33% and +5.66%, respectively, from last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for American Eagle Outfitters. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. American Eagle Outfitters is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, American Eagle Outfitters is currently trading at a Forward P/E ratio of 9.58. This expresses a discount compared to the average Forward P/E of 14.8 of its industry.

It is also worth noting that AEO currently has a PEG ratio of 3.68. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Retail - Apparel and Shoes industry was having an average PEG ratio of 1.38.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 75, putting it in the top 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow AEO in the coming trading sessions, be sure to utilize Zacks.com.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research