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Why American Eagle (AEO) is Such a Great Value Stock Pick Right Now?


Value investing is always a very popular strategy, and for good reason. After all, who doesn’t want to find stocks that have low PEs, solid outlooks, and decent dividends?

Fortunately for investors looking for this combination, we have identified a strong candidate which may be an impressive value; American Eagle Outfitters, Inc. AEO.

American Eagle in Focus

AEO may be an interesting play thanks to its forward PE of 11.85, its P/S ratio of 0.65, and its decent dividend yield of 3.7%. These factors suggest that American Eagle is a pretty good value pick, as investors have to pay a relatively low level for each dollar of earnings, and that AEO has decent revenue metrics to back up its earnings.

American Eagle Outfitters, Inc. PE Ratio (TTM)

But before you think that American Eagle is just a pure value play, it is important to note that it has been seeing solid activity on the earnings estimate front as well. For current year earnings, the consensus has gone up by 3.7% in the past 30 days, thanks to no upward revisions in the past one months compared to two lower.

This estimate strength is actually enough to push AEO to a Zacks Rank #2 (Buy), suggesting it is poised to outperform. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

So really, American Eagle is looking great from a number of angles thanks to its PE below 20, a P/S ratio below one, and a strong Zacks Rank, meaning that this company could be a great choice for value investors at this time.

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Zacks Investment Research
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