2013 has been an unpleasant year for American Eagle Outfitters (AEO) shareholders. The stock opened the year trading at $20.52 before dropping to a 52-week low of $13.14 in October. Since October American Eagle has been able to claw its way back to $16.31 but the teen retail sector remains under heavy pressure. The AEO earnings report which is expected before the market opens Friday could be an opportunity to distinguish the company from its peers including Aeropostale (ARO) and Express (EXPR) which both failed to meet earnings expectations from analysts on Wednesday.
The information below is derived from data submitted to the Estimize platform by a set of Buy Side and Independent analyst contributors. You can share your own estimates as well by visiting estimize.com.
The current Wall Street consensus expectation is for AEO to report 19 cent EPS and $852.11M revenue while the current Estimize consensus from Buy Side and Independent contributing analysts is 17 cent EPS and $847.63M revenue. The Estimize consensus is more accurate than Wall Street 69.5% of the time because it represents unbiased market expectations. By tapping into a wider distribution of contributors including hedge fund analysts, asset management firm analysts, industry experts and students Estimize is better able to capture the true market outlook. The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case, we're seeing a larger differential between the Estimize and Wall Street earnings numbers compared to previous quarters.
Over the past four months the Wall Street consensus trend for EPS has fallen dramatically from 46 cents to 19 cents while the revenue expectations have also decreased from $945.31M to $852.11M. The Estimize EPS consensus has remained at 17 cents while the Revenue consensus has declined from $848.92M to $842.21M.
Over the previous six quarters AEO has beaten the Wall Street consensus on EPS two times and has been accurately predicted once. The retailer has also beaten the consensus on revenue three times and was successfully forecasted once. Over the past four quarters for which there is sufficient data AEO has beaten the Estimize consensus for EPS one time, has come up short once, and has been accurately predicted twice. AEO has beaten the Estimize consensus for revenue three out of four times.
The distribution of estimates published by analysts on Estimize range from 14 cent to 19 cent EPS and $838.00M to $857.00M revenues. We're seeing about an average distribution of estimates this quarter for AEO compared to previous quarters. The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution signals the potential for greater volatility post earnings, a smaller vice versa.
The analyst with the highest estimate confidence rating this quarter is TF633075 who projects 19 cent EPS and $857.0M revenue. TF633075 covers 13 different Consumer Discretionary stocks on Estimize.com. Estimize confidence ratings are calculated through algorithms developed by our deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy.
Despite the analyst with the highest confidence rating predicting AEO to meet the Street's EPS target and exceed on revenue, the Estimize community consensus predicts that AEO will fall short of both.