American Eagle Outfitters Faces Anticipated Earnings Decline

American Eagle Outfitters is set to release its earnings on May 27th, showing expected revenue of $1.1 billion and EPS of -$0.22. A cautious outlook may affect stock valuations.

Date: 26-05-2025

AI Rating: 4

Quarterly Earnings Outlook
American Eagle Outfitters is projected to report a revenue of $1,105,208,357, with an expected loss in earnings per share (EPS) of -$0.22. This anticipated negative EPS indicates a struggle for the company amidst competition in the retail sector, which could lead to a bearish sentiment among investors.

Insider Trading
Recently, an insider trade where Cary D McMillan sold 2,999 shares could signal a lack of confidence from key executives regarding the company's future performance. Insider selling, especially without corresponding buys, can reflect a negative outlook, further amplifying investor caution ahead of the earnings release.

Hedge Fund Activity
The activity of institutional investors shows a concerning trend, with 178 investors increasing positions while 260 reduced their stakes in the most recent quarter. Large sell-offs by major funds, such as Congress Asset Management, which divested nearly all of its shares (-99.5%), suggests a lack of confidence in the stock's immediate future. This could place downward pressure on the stock price post-earnings.

Price Targets
Recent targets from analysts range widely, with a median target of $16.5. Analyst Paul Lejuez from Citigroup set a target of $13.0, indicating a bearish outlook, while BMO's Simeon Siegel has a higher target of $20.0. This divergence hints at uncertainty among analysts about the company’s recovery prospects.

Overall, the context around American Eagle Outfitters suggests that professional investors should be cautious. Given the anticipated loss in EPS, insider selling, and mixed institutional activity, the outlook for the stock is generally negative. These factors combined could negatively impact stock prices in the near term.

Stocks: AEO