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Shareholders of American Eagle Outfitters, Inc. (NYSE:AEO) will be pleased this week, given that the stock price is up 11% to US$28.54 following its latest full-year results. It was a pretty bad result overall; while revenues were in line with expectations at US$3.8b, statutory losses exploded to US$1.26 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for American Eagle Outfitters
Taking into account the latest results, the current consensus from American Eagle Outfitters' eleven analysts is for revenues of US$4.59b in 2022, which would reflect a major 22% increase on its sales over the past 12 months. American Eagle Outfitters is also expected to turn profitable, with statutory earnings of US$1.79 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.45b and earnings per share (EPS) of US$1.47 in 2022. So it seems there's been a definite increase in optimism about American Eagle Outfitters' future following the latest results, with a very substantial lift in the earnings per share forecasts in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 11% to US$30.00per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic American Eagle Outfitters analyst has a price target of US$37.00 per share, while the most pessimistic values it at US$18.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that American Eagle Outfitters' rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 2.7% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that American Eagle Outfitters is expected to grow much faster than its industry.