AEO Surging in November on Latest Acquisition News

American Eagle Outfitters is also releasing earnings on Nov. 22

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American Eagle Outfitters, Inc. (NYSE:AEO) is a global specialty retailer offering clothing, accessories, and personal care products under its American Eagle and Aerie brands. The retailer operates stores in the United States, Canada, Mexico, and Hong Kong, and ships to 81 countries worldwide through its websites.

On Tuesday, Nov. 2, American Eagle Outfitters announced that it has agreed to acquire Quiet Logistics in a $350 million cash deal as part of an effort to progress AEO’s ongoing supply chain transformation. Quiet Logistics is a supply chain partner that utilizes technology and robotics to provide cost-effective services for AEO and other consumer brands.

According to American Eagle's press release, the Quiet Logistics network will support AEO's continued growth by helping them expand their customer base to other brands and retailers seeking advanced logistics capabilities. This latest acquisition builds upon another recent acquisition of AirTerra. Quiet Logistics will be a wholly owned subsidiary of AEO, but will continue to run its business independently.

American Eagle stock is already up about 11% this month, thanks in part to its Nov. 2 jump of more than 5%. The stock is still well below its Sept. 25 record peak of $38.99, last seen up 0.2% at $26.58, but it sports a 31.9% lead for the year. AEO found a floor at the $23.50 level in October, with more recent support emerging at the 320-day moving average. 

With earnings looming in the not-so-distant future, due out on Monday, Nov. 22, analysts are currently projecting that American Eagle Outfitters will report an EPS (earnings per share) of $0.60. Sentiment surrounding AEO is mostly bullish ahead of the event, too. Of the 10 in coverage, six say "buy" or better, and the 12-month consensus price target of $39.67 is a 49.3% premium to current levels. 

Moreover, American Eagle stock trades at an average price-earnings ratio of 17.96, but has a forward price-earnings ratio of 9.13, making AEO an intriguing option for value investors. American Eagle Outfitters also offers a forward dividend of $0.72, giving AEO a dividend yield of 2.71%.

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