Trendy clothing chain American Eagle Outfitters recently traded at a more than 2-year high amid brisk earnings growth. On Wednesday, the IBD Relative Strength Rating for American Eagle stock rose to 72, up from 65 the day before.
The upgraded 72 RS Rating means American Eagle stock bested more than 70% of all stocks for price performance over the past year. Pittsburgh-based American Eagle Outfitters targets mainly Gen Z and millennials. It's the parent to its namesake brand, as well as Aerie, Unsubscribed and Todd Snyder brands.
American Eagle Stock Up 10% After 100% Profit Hike
AEO stock is up about 10% in the last three weeks and has closed higher five of the last eight trading sessions.
Over the past year its profit growth ranged widely, from 17% to 525%. Most recently, on May 29 the company reported 100% fiscal first quarter earnings growth, up from 65% growth the prior stanza.
Among its other ratings, American Eagle stock has a strong 88 Composite Rating out of a best-possible 99. It has an 83 Earnings Per Share Rating and a B Accumulation/Distribution Rating. On an A+ to E scale the A/D rating measures institutional buying by mutual funds, university funds and the like. The B rating shows that big money investors are buying more than selling.
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The watchlist candidate is working on a consolidation with a 26.44 entry. That's the 2-1/2 year high it set on March 7. It consolidated from there and traded at about 21 Wednesday afternoon. See if the stock can clear the breakout price in volume at least 40% higher than normal.
American Eagle's earnings per share grew 100% last quarter to 34 cents per share on a 6% rise in sales to $1.14 billion. The prior three quarters its EPS grew 525%, 17% and 65%. The 6% sales increase was down from a 12% rise the prior quarter.
Clothing Group Thriving
American Eagle Outfitters holds the No. 10 rank among its peers in the 32-stock Retail-Apparel/Shoes/Accessories industry group. Abercrombie & Fitch, Burlington Stores and J.Jill are among the top five highly rated stocks in the group.
The group as a whole has an outstanding A Relative Strength Rating. Additionally, its ranks a strong no. 28 on IBD's list of 197 industry groups.
The proprietary IBD Relative Strength Rating, on an A-to-E scale, measures market leadership by showing how a stock or stock group's price action over the last 52 weeks compares to that of the others in our database.
Over 100 years of market history shows that the stocks that go on to make the biggest gains often have an RS Rating north of 80 in the early stages of their moves. See if American Eagle Outfitters can continue to rebound and hit that benchmark.
Please follow James DeTar on X, formerly known as Twitter, @JimDeTar
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