American Eagle Outfitters (AEO): Today's Featured Retail Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

American Eagle Outfitters ( AEO) pushed the Retail industry lower today making it today's featured Retail laggard. The industry as a whole closed the day up 0.8%. By the end of trading, American Eagle Outfitters fell 22 cents (-1.1%) to $20.83 on average volume. Throughout the day, 3.2 million shares of American Eagle Outfitters exchanged hands as compared to its average daily volume of 3.9 million shares. The stock ranged in price between $20.64-$21.15 after having opened the day at $21.08 as compared to the previous trading day's close of $21.05. Other companies within the Retail industry that declined today were: Orchard Supply Hardware ( OSH), down 7.5%, Bon-Ton Stores ( BONT), down 4.8%, Body Central ( BODY), down 3.9%, and Susser Holdings Corporation ( SUSS), down 3.6%.
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American Eagle Outfitters, Inc., together with its subsidiaries, operates as an apparel and accessories retailer in the United States and Canada. American Eagle Outfitters has a market cap of $4.19 billion and is part of the services sector. The company has a P/E ratio of 23.1, above the S&P 500 P/E ratio of 17.7. Shares are up 39.2% year to date as of the close of trading on Friday. Currently there are 15 analysts that rate American Eagle Outfitters a buy, no analysts rate it a sell, and seven rate it a hold.

TheStreet Ratings rates American Eagle Outfitters as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the positive front, HHGregg Incorporated ( HGG), up 11.8%, Cache ( CACH), up 10.7%, QKL Stores ( QKLS), up 9.4%, and Aeropostale ( ARO), up 6.8%, were all gainers within the retail industry with Target ( TGT) being today's featured retail industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the retail industry could consider SPDR S&P Retail ETF ( XRT) while those bearish on the retail industry could consider ProShares Ultra Sht Consumer Goods ( SZK).

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