Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

American Eagle Outfitters, Inc. (AEO)

Company Dividend Discount ModelIndustry: Apparel - RetailSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$11.65 - $18.20$14.67
Multi-Stage$13.27 - $14.49$13.87
Blended Fair Value$14.27
Current Price$16.71
Upside-14.61%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS0.78%-0.08%0.540.470.360.640.130.520.540.490.510.54
YoY Growth--15.07%29.43%-43.16%398.58%-75.37%-4.47%9.68%-2.35%-6.74%0.01%
Dividend Yield--4.84%1.92%2.70%4.20%0.37%6.67%2.24%2.45%3.59%3.79%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)208.42
(-) Cash Dividends Paid (M)87.84
(=) Cash Retained (M)120.59
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)41.6826.0515.63
Cash Retained (M)120.59120.59120.59
(-) Cash Required (M)-41.68-26.05-15.63
(=) Excess Retained (M)78.9094.53104.95
(/) Shares Outstanding (M)179.39179.39179.39
(=) Excess Retained per Share0.440.530.59
LTM Dividend per Share0.490.490.49
(+) Excess Retained per Share0.440.530.59
(=) Adjusted Dividend0.931.021.07
WACC / Discount Rate10.51%10.51%10.51%
Growth Rate2.34%3.34%4.34%
Fair Value$11.65$14.67$18.20
Upside / Downside-30.26%-12.22%8.89%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)208.42215.39222.59230.03237.73245.67253.04
Payout Ratio42.14%51.72%61.29%70.86%80.43%90.00%92.50%
Projected Dividends (M)87.84111.39136.42163.00191.20221.11234.06

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate10.51%10.51%10.51%
Growth Rate2.34%3.34%4.34%
Year 1 PV (M)99.83100.80101.78
Year 2 PV (M)109.56111.71113.89
Year 3 PV (M)117.32120.79124.33
Year 4 PV (M)123.33128.22133.25
Year 5 PV (M)127.81134.17140.79
PV of Terminal Value (M)1,802.541,892.351,985.69
Equity Value (M)2,380.382,488.042,599.73
Shares Outstanding (M)179.39179.39179.39
Fair Value$13.27$13.87$14.49
Upside / Downside-20.59%-17.00%-13.27%

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