American Eagle Stock Unravels on Revenue, Forecast Miss

The company did post a marginal earnings beat

Lillian Currens
Mar 7, 2019 at 9:53 AM
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The shares of American Eagle Outfitters (NYSE:AEO) are down 1.1% at $21.12 in early trading after the apparel concern's fourth-quarter results. The company reported a marginal earnings beat, but its revenue and first-quarter guidance fell short of analysts' expectations. American Eagle CEO Jay Schottenstein noted that the company's new lingerie business, Aerie, "continued to deliver consistent performance."

AEO stock hit an 11-year peak of $29.88 back in August before falling to $17 in late December -- shaving off 43%. The stock has since attempted a rebound off last year's lows, with a boost from 50-day moving average. However, a recent ceiling at the $21- $22 area has kept a lid on the shares. 

While nine of the 12 analysts following the stock see AEO as a "strong buy," it still holds one "hold" rating, and two "sell" or worse ratings. The consensus 12-month price target of $24.93 is relatively optimistic, too, representing an 18% premium to current levels. 

Options players have taken a more pessimistic position, though. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) over two American Eagle puts have been bought for every call in the past fifty sessions. This ratio stands in the 90th percentile of its annual range, suggesting a much healthier-than-usual appetite for bearish bets of late. 


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