American Eagle Outfitters (AEO): Competitor Closure Should Bump Consensus SSS and EPS Higher - FBR

September 6, 2016 6:08 AM EDT
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Price: $15.30 +0.07%

Rating Summary:
    21 Buy, 15 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 22 | New: 54
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FBR Capital analyst, Susan Anderson, reiterated her Outperform rating on shares of American Eagle Outfitters (NYSE: AEO) after hearing some investor skepticism concerning AEO's ability to continue to drive the comp in 2H16/2017.

The analyst expects good product execution (innovative, technical, differentiated, trend-right fashion) to continue to drive SSS as well as AEO to benefit from competitor closures and sales retention in its own closed stores.

The analyst performed a sales retention analysis and a competitor closure analysis, which showed that AEO's SSS could benefit +0.9% in 2016 and +2.2% in 2017 from its own and competitor store closures. If correct, this could add $0.01/$0.03 to EPS in 2016/2017.

As a result, she is increasing comp estimates ahead of consensus to +3.0%/+4.0% in 3Q16/4Q16 (versus the Street at +2.9%/+3.3%. Our EPS estimates go to $1.33/$1.45 in 2016/2017, versus our previous estimates of $1.32/$1.43, respectively.

For an analyst ratings summary and ratings history on American Eagle Outfitters click here. For more ratings news on American Eagle Outfitters click here.

Shares of American Eagle Outfitters closed at $18.40 yesterday.

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