American Eagle Outfitters: Positive Comps Growth And Deep Value Prices Make It An Appealing Buy

Gary Alexander
31.2K Followers
(11min)

Summary

  • American Eagle Outfitters is a value stock, appealing due to a 30% drop and a strategic growth plan focusing on popular subsidiaries like Aerie.
  • The company, founded in 1977, includes brands American Eagle, Aerie, and Offline, with American Eagle focusing on low-cost denim to regain sales momentum.
  • Aerie has driven recent growth, leading to store expansions and contributing significantly to company revenue, while American Eagle store counts are being reduced.
  • Despite macroeconomic uncertainties, American Eagle's deep value at ~7x P/E - amid a generous buyback plan and 5% yield - makes it a very compelling buy.

American Eagle Outfitters retail store

Robert Way/iStock Editorial via Getty Images

With the stock market now having recovered a large chunk of its tariff-related losses, opportunistic investors should still be focusing on one thing: finding value stocks that are likely to outperform should the market turn

This article was written by

31.2K Followers
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in AEO over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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