AEO Extends 14-Year Highs on Revenue Forecast

In response, no fewer than five analysts raised their price targets

Deputy Editor
Apr 15, 2021 at 9:49 AM
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The shares of American Eagle Outfitters Inc (NYSE:AEO) are up 4.5% to trade at $34.47 at last check, after the company announced that it expects its first-quarter revenue to top $1 billion. In response, no fewer than five analysts have raised their price targets, including B. Riley to $40. 

Today's pop has AEO extending yesterday's 14-year high. After the stock's late-March pullback was caught by the 50-day moving average, American Eagle stock has been rallying, with only three of the last 14 days of trading ending in the red since then. Coming into today, the equity is up 285.7% year-over-year.

There is still some room for increased positive sentiment amongst analysts, with five of the 15 in coverage carrying a "hold" rating on AEO. Meanwhile, though short interest has begun to fall off, it still represents 10.8% of the security's available float, or over three days' worth of pent-up buying power. 

Meanwhile, a shift in the options pits could send American Eagle stock higher as well. The stock's 10-day put/call volume ratio of 1.65 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 83% of readings from the past year. In other words, puts are being picked up at a faster-than-usual rate. 

These options are attractively priced at the moment, too. The stock's Schaeffer's Volatility Index (SVI) of 44% stands higher than just 5% of readings in its annual range, implying that options players are pricing in low volatility expectations at the moment. 




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