A solid comparable-store sales performance helped American Eagle Outfitters (AEO) to register strong top-line growth of 10.7% during third-quarter 2011. American Eagle leverages its sturdy line of well-established brands and their premium positioning to uphold its unique niche in the specialty retailing sector.
Moreover, the company's cost-saving initiatives and long-term growth strategy will not only provide financial flexibility but will also help to drive value proposition. Further, management's efforts to boost cash flow and maintain a debt-free healthy balance sheet bode well for future operating performance.
Our long-term Outperform recommendation on the stock indicates that it would perform well above the broader market. Our target price of $16.00, based on 17.2x 2011 EPS, reflects this view.
AMER EAGLE OUTF (AEO): Free Stock Analysis Report
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