AEO
American Eagle Outfitters, Inc.
$17.79
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 1.5% above fair value
You pay
$17.79
Bear
$14.02
Fair
$17.53
Bull
$21.03
Bear
$14.02
-21.2%
$1.11 × 12x P/E
Fair
$17.53
-1.5%
$1.11 × 15x P/E
Bull
$21.03
+18.2%
$1.11 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
16.1x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $19.25 from 52 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $17.53 per share.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples