Investing in American Eagle Outfitters Inc (AEO) might be an excellent idea, but the stock is currently overvalued/undervalued

Kenneth Phillips

While American Eagle Outfitters Inc has overperformed by 7.03%, investors are advised to look at stock chart patterns for technical insight. Within its last year performance, AEO rose by 17.76%, with highs and lows ranging from $22.63 to $9.27, whereas the simple moving average jumped by 48.85% in the last 200 days.

On September 04, 2025, Telsey Advisory Group Reiterated American Eagle Outfitters Inc (NYSE: AEO) to Market Perform. A report published by BofA Securities on August 25, 2025, Downgraded its rating to ‘Underperform’ for AEO. JP Morgan also Downgraded AEO shares as ‘Underweight’, setting a target price of $9 on the company’s shares in a report dated July 28, 2025. Telsey Advisory Group Reiterated the rating as Market Perform on March 13, 2025, but set its price target from $18 to $12. Barclays March 13, 2025d its ‘Equal Weight’ rating to ‘Underweight’ for AEO, as published in its report on March 13, 2025. Morgan Stanley’s report from February 05, 2025 suggests a price prediction of $17 for AEO shares, giving the stock a ‘Equal-Weight’ rating. Morgan Stanley also rated the stock as ‘Equal-Weight’.

Analysis of American Eagle Outfitters Inc (AEO)

Investors in American Eagle Outfitters Inc will get a return regardless of how the company performs over the next quarter since the company’s dividend stands at $0.50 per share. Further, the quarter-over-quarter decrease in sales is -0.57%, showing a negative trend in the upcoming months.

One of the most important indicators of American Eagle Outfitters Inc’s future performance is equity, which can be evaluated using several well-rounded types of analysis and research techniques. The goal here is to ensure that your current return on equity of 12.17% is sufficient for you to turn a profit off your investment. Taking into account the quick ratio of the company, currently set at 0.71, you can see that the company can cover any debts it may have, which can easily be seen in the annual report of the company.

For any stock, average volume can also provide valuable insight into volatility, and AEO is recording 14.36M average volume. On a monthly basis, the volatility of the stock is set at 5.67%, whereas on a weekly basis, it is put at 6.98%, with a gain of 7.15% over the past seven days. Furthermore, long-term investors anticipate a median target price of $15.17, showing decline from the present price of $19.63, which can serve as yet another indication of whether AEO is worth investing in or should be passed over.

How Do You Analyze American Eagle Outfitters Inc Shares?

The Apparel Retail market is dominated by American Eagle Outfitters Inc (AEO) based in the USA. When comparing American Eagle Outfitters Inc shares with other companies under Consumer Cyclical, the P/E value is an influential factor to note. This is because it represents an indication of the future growth of the company in terms of investors’ expectations. Ultimately, the value of the latter should demonstrate steady, rapid growth, which is an accurate measure of the company’s progress. In addition to the value of 18.90, there is a growth in quarterly earnings of 15.74%.

Along with the fundamentals, it is also important to consider how many employees own shares of the company. This is because the values should be in line with investors’ expectations. As such, the current holdings of company stock inside the company are set at 8.12%. This can enable you to see the extent to which executives own the company’s stock. As opposed to executive stock, institutional ownership accounts for 94.38% of the company’s shares, contributing to an indication of company value, since large shareholders may signify strength within the organization.

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