American Eagle Outfitters, Inc. (AEO) is set to release third-quarter earnings after the market closes on Tuesday, December 2, and Wall Street is bracing for a year-over-year profit decline.
Analysts are penciling in earnings of 44 cents per share for the Pittsburgh-based apparel retailer, down from 48 cents per share in the same quarter last year. That's about an 8% decline in per-share earnings. On the revenue side, though, things look slightly better. The consensus estimate calls for $1.32 billion in quarterly revenue, up from $1.29 billion a year earlier.
American Eagle shares closed at $20.40 on Friday, up 0.7% for the session. The company also declared a regular quarterly dividend of 12.5 cents per share back on September 16.
So what are the best analysts saying ahead of the print? Let's look at recent calls from Wall Street's most accurate forecasters on AEO.
What the Most Accurate Analysts Are Saying
Telsey Advisory Group analyst Dana Telsey, who boasts a 62% accuracy rate, maintained a Market Perform rating with a price target of $18 on November 25. That's below where shares currently trade, suggesting limited upside in Telsey's view.
UBS analyst Jay Sole, working with a 68% accuracy rate, maintained a Buy rating and bumped his price target from $21.50 to $22 on November 19. That's one of the more bullish takes in the group.
Citigroup analyst Paul Lejuez, with a 65% accuracy rate, kept a Neutral rating but raised his price target from $15 to $18 on November 11. The target increase suggests improving sentiment, even if Lejuez isn't ready to fully embrace the stock.
Morgan Stanley analyst Alex Straton, accurate 62% of the time, maintained an Equal-Weight rating and significantly boosted the price target from $10 to $17 on September 18. That's a substantial revision, though still below current levels.
Barclays analyst Adrienne Yih, sporting a 67% accuracy rate, maintained an Underweight rating but raised the price target from $9 to $14 on September 4. Even the bears are getting less bearish, it seems.
The picture emerging from these forecasts is one of cautious optimism mixed with lingering concerns. Revenue growth is expected to continue, but profit margins appear to be under pressure. Tuesday's report should clarify whether American Eagle can navigate the current retail environment while maintaining profitability.
