American Eagle (AEO) AI Stock Analysis

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American Eagle

(NYSE:AEO)

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Outperform 77 (OpenAI - 4o)

Rating:77Outperform

Price Target:

$27.00

▲(12.92% Upside)

American Eagle's overall stock score is driven by strong technical indicators and a positive earnings call, reflecting confidence in future growth. However, financial performance concerns, particularly in profitability and cash flow, and a high valuation relative to peers, temper the outlook.

Positive Factors

Revenue Growth

The 6% revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability.

Aerie Brand Performance

Aerie's 11% comp growth highlights its strong market position and potential for continued expansion in the apparel sector.

Operational Improvements

Cost control and efficiency improvements enhance profitability and operational resilience, benefiting long-term performance.

Negative Factors

Profitability Margins Decline

Declining profitability margins may indicate challenges in cost management and pricing power, affecting long-term earnings potential.

Cash Flow Challenges

The decline in free cash flow growth suggests potential liquidity issues, which could limit investment and growth opportunities.

Increased SG&A Expenses

Rising SG&A expenses can pressure operating margins, potentially impacting profitability if not offset by revenue growth.

American Eagle (AEO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.91B

Dividend Yield2.09%

Average Volume (3M)7.68M

Price to Earnings (P/E)19.9

Beta (1Y)1.31

Revenue Growth-1.15%

EPS Growth-0.98%

CountryUS

Employees9,000

SectorConsumer Cyclical

Sector Strength84

IndustryApparel - Retail

Share Statistics

EPS (TTM)0.53

Shares Outstanding169,338,840

10 Day Avg. Volume11,858,508

30 Day Avg. Volume7,679,299

Financial Highlights & Ratios

PEG Ratio0.10

Price to Book (P/B)1.76

Price to Sales (P/S)0.58

P/FCF Ratio12.25

Enterprise Value/Market Cap1.21

Enterprise Value/Revenue0.89

Enterprise Value/Gross Profit2.70

Enterprise Value/Ebitda9.21

Forecast

1Y Price Target

$22.89

Price Target Upside-4.27% Downside

Rating ConsensusHold

Number of Analyst Covering10

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

American Eagle Business Overview & Revenue Model

Company DescriptionAmerican Eagle Outfitters, Inc. (AEO) is a leading global specialty retailer that operates primarily in the apparel and accessories sector. Established in 1977, the company targets a young adult demographic through its flagship brand, American Eagle, and its sister brand, Aerie, which focuses on intimate apparel and activewear. AEO offers a diverse range of products including casual apparel, footwear, and accessories, with a strong emphasis on quality and trend-forward designs. With a robust online presence and a network of retail stores across the United States and internationally, American Eagle is committed to delivering an engaging shopping experience for its customers.

How the Company Makes MoneyAmerican Eagle generates revenue primarily through the sale of its apparel and accessories in both physical retail stores and online. The company adopts a multi-channel retail model that allows it to reach a wide audience, leveraging e-commerce as a significant revenue stream alongside traditional brick-and-mortar sales. Key revenue streams include sales from American Eagle and Aerie branded products, with Aerie experiencing notable growth in recent years due to increasing demand for comfortable and body-positive apparel. Additionally, AEO benefits from seasonal promotions, loyalty programs, and partnerships with various social media influencers and platforms to enhance brand visibility and drive sales. The company's ability to adapt to changing consumer trends and preferences, alongside its focus on sustainability and inclusivity, further contributes to its financial performance.

American Eagle Key Performance Indicators (KPIs)

Any

Store Count

Store Count
Tracks the number of retail locations, reflecting the company’s physical market presence and potential for customer reach and sales growth.

Chart InsightsAmerican Eagle's store count has shown resilience, with a steady increase from 2020 to 2023, peaking in late 2023. However, recent fluctuations suggest strategic recalibrations amid broader challenges. The latest earnings call reveals a focus on optimizing operations, including supply chain enhancements and cost management, despite facing a significant inventory write-down and declining sales. The company's commitment to share repurchases signals confidence in long-term growth, but near-term hurdles like increased promotional activity and margin pressures could impact future store expansion strategies.

Data provided by:

The Fly

American Eagle Earnings Call Summary

Earnings Call Date:Dec 02, 2025

(Q3-2025)

% Change Since: |

Next Earnings Date:Mar 04, 2026

Earnings Call Sentiment Positive

American Eagle Outfitters reported a strong third quarter marked by record revenue and effective marketing strategies, particularly in the Aerie brand. However, challenges such as tariff impacts and increased SG&A expenses were noted. The overall sentiment is positive due to strong performance and an optimistic outlook for the fourth quarter.

Q3-2025 Updates

Positive Updates

Record-Breaking Revenue

Total revenue increased 6% to $1.4 billion, marking a third-quarter record. Operating income of $113 million exceeded guidance, and diluted EPS increased by 10% compared to the previous year.

Strong Performance from Aerie

Aerie's comps were up 11%, showing strength across all categories, including intimates, apparel, sleep, and Offline. The brand continues to see significant market opportunities.

Successful Marketing Campaigns

Collaborations with Sydney Sweeney and Travis Kelce generated over 44 billion impressions, increasing customer counts and loyalty by 4%.

Operational Improvements

The company successfully controlled costs and created efficiencies, resulting in a gross profit increase of 5% and improved buying, occupancy, and warehousing costs.

Positive Outlook for Fourth Quarter

The fourth quarter is off to an excellent start, prompting an increase in operating income guidance to a range of $155 million to $160 million.

Negative Updates

Impact of Tariffs

Results included about $20 million of net impact from tariffs, with a projected $50 million impact in the fourth quarter.

Challenges in American Eagle's Women's Segment

While there was a strong back-to-school season, some out-of-stocks in best-selling items and challenges in non-denim bottoms, shirts, and dresses were noted.

Increased SG&A Expenses

SG&A expenses increased by 10% due to investments in advertising, impacting operating margins despite revenue growth.

Company Guidance

During the American Eagle Outfitters, Inc. Third Quarter 2025 Earnings Conference Call, the company reported a record total revenue of $1.4 billion, marking a 6% increase. Operating income exceeded expectations at $113 million, surpassing the guidance of $95 to $100 million. The diluted EPS for the quarter was $0.53, showing a 10% increase compared to the previous year. Comparable sales rose by 4%, with Aerie achieving an 11% increase, driven by robust demand across all categories, including intimates and apparel. The company's marketing campaigns, including collaborations with high-profile figures like Cindy Sweeney and Travis Kelce, contributed to a 4% growth in customer loyalty. For the fourth quarter, the company raised its operating income guidance to $155 to $160 million, expecting comp sales growth of 8% to 9%. The impact from tariffs was noted as approximately $50 million for the quarter, with continued adjustments in operational costs to mitigate financial pressures.

American Eagle Financial Statement Overview

Summary

American Eagle's financial performance is stable with reasonable profitability margins despite a decline in revenue growth. The balance sheet shows moderate leverage and good equity management, while cash flow performance has improved significantly, enhancing liquidity.

Income Statement

Positive

American Eagle's income statement shows a mixed performance. The TTM data indicates a decline in revenue growth by 14%, which is concerning. However, the company maintains a reasonable gross profit margin of 36.99% and a net profit margin of 3.74%. The EBIT and EBITDA margins are also moderate at 5.72% and 9.87%, respectively. Despite the revenue decline, the company has managed to sustain profitability, which is a positive sign.

Balance Sheet

Positive

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.16, indicating a moderate level of leverage. The return on equity is 12.07%, showing decent profitability relative to shareholder equity. The equity ratio stands at 38.04%, suggesting a balanced capital structure. While the leverage is slightly high, the company has managed to maintain a healthy equity base.

Cash Flow

Positive

Cash flow analysis reveals a strong free cash flow growth rate of 33.87% in the TTM period, indicating improved cash generation. The operating cash flow to net income ratio is 0.52, and the free cash flow to net income ratio is 0.69, reflecting efficient cash conversion. Despite fluctuations in free cash flow growth in previous periods, the recent improvement is a positive indicator.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.34B	5.33B	5.26B	4.99B	5.01B	3.76B
Gross Profit	1.76B	1.88B	1.81B	1.54B	1.83B	985.75M
EBITDA	515.53M	658.86M	477.02M	404.98M	756.43M	-104.73M
Net Income	208.42M	329.38M	170.04M	125.14M	419.63M	-209.27M
Balance Sheet
Total Assets	4.19B	3.83B	3.56B	3.42B	3.79B	3.43B
Cash, Cash Equivalents and Short-Term Investments	112.83M	358.96M	454.09M	170.21M	434.77M	850.48M
Total Debt	1.76B	1.45B	1.19B	1.37B	1.81B	1.80B
Total Liabilities	2.56B	2.06B	1.82B	1.82B	2.36B	2.35B
Stockholders Equity	1.63B	1.77B	1.74B	1.60B	1.42B	1.09B
Cash Flow
Free Cash Flow	202.60M	254.26M	406.27M	145.92M	69.82M	74.52M
Operating Cash Flow	329.08M	476.80M	580.71M	406.30M	303.67M	202.50M
Investing Cash Flow	-307.24M	-217.51M	-287.43M	-261.38M	-594.60M	-73.94M
Financing Cash Flow	-332.66M	-301.91M	-109.47M	-407.89M	-125.20M	359.91M

American Eagle Technical Analysis

Technical Analysis Sentiment

Positive

Last Price23.91

Price Trends

50DMA

17.65

Positive

100DMA

16.04

Positive

200DMA

13.39

Positive

Market Momentum

MACD

1.73

Negative

RSI

73.03

Negative

STOCH

73.24

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 23.91 is above the 20-day moving average (MA) of 19.91, above the 50-day MA of 17.65, and above the 200-day MA of 13.39, indicating a bullish trend. The MACD of 1.73 indicates Negative momentum. The RSI at 73.03 is Negative, neither overbought nor oversold. The STOCH value of 73.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AEO.

American Eagle Risk Analysis

American Eagle disclosed 30 risk factors in its most recent earnings report. American Eagle reported the most risks in the "Legal & Regulatory" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

American Eagle Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ANF	78 Outperform	$4.47B	9.20	40.72%	―	7.57%	1.75%
URBN	78 Outperform	$6.79B	14.33	19.34%	―	11.09%	51.51%
AEO	77 Outperform	$3.91B	19.90	12.36%	2.09%	-1.15%	-0.98%
VSCO	71 Outperform	$3.93B	24.84	31.50%	―	2.97%	9.85%
BKE	70 Outperform	$2.86B	13.71	41.26%	6.82%	4.67%	3.46%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
FL	44 Neutral	―	―	―	―	-3.58%	-4.20%

* Consumer Cyclical Sector Average

Performance Comparison

AEO

American Eagle

23.91

6.95

40.98%

ANF

Abercrombie Fitch

99.96

-37.25

-27.15%

BKE

Buckle

57.16

8.43

17.30%

Foot Locker

24.01

2.12

9.68%

URBN

Urban Outfitters

76.89

25.32

49.10%

VSCO

Victoria's Secret

52.31

5.06

10.71%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Dec 10, 2025