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$20.02 - $40.75$28.00
Multi-Stage$25.10 - $27.51$26.28
Blended Fair Value$27.14
Current Price$16.71
Upside62.43%
DecisionBuy

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 Rate7.10%7.10%7.10%
Growth Rate2.34%3.34%4.34%
Fair Value$20.02$28.00$40.75
Upside / Downside19.79%67.57%143.84%

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 Rate7.10%7.10%7.10%
Growth Rate2.34%3.34%4.34%
Year 1 PV (M)103.00104.01105.02
Year 2 PV (M)116.65118.94121.26
Year 3 PV (M)128.88132.70136.59
Year 4 PV (M)139.80145.35151.05
Year 5 PV (M)149.50156.94164.69
PV of Terminal Value (M)3,864.414,056.944,257.06
Equity Value (M)4,502.254,714.884,935.66
Shares Outstanding (M)179.39179.39179.39
Fair Value$25.10$26.28$27.51
Upside / Downside50.19%57.29%64.65%

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