Results: American Eagle Outfitters, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

Shareholders might have noticed that American Eagle Outfitters, Inc. (NYSE:AEO) filed its first-quarter result this time last week. The early response was not positive, with shares down 5.1% to US$21.97 in the past week. It looks like a credible result overall - although revenues of US$1.1b were what the analysts expected, American Eagle Outfitters surprised by delivering a (statutory) profit of US$0.34 per share, an impressive 20% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for American Eagle Outfitters

Following last week's earnings report, American Eagle Outfitters' eleven analysts are forecasting 2025 revenues to be US$5.41b, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 58% to US$1.77. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.43b and earnings per share (EPS) of US$1.72 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$25.64, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on American Eagle Outfitters, with the most bullish analyst valuing it at US$35.00 and the most bearish at US$18.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the American Eagle Outfitters' past performance and to peers in the same industry. We would highlight that American Eagle Outfitters' revenue growth is expected to slow, with the forecast 2.1% annualised growth rate until the end of 2025 being well below the historical 6.4% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.9% annually. Factoring in the forecast slowdown in growth, it seems obvious that American Eagle Outfitters is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards American Eagle Outfitters following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$25.64, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on American Eagle Outfitters. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple American Eagle Outfitters analysts - going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for American Eagle Outfitters you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.