American Eagle Outfitters, Inc. (AEO) DCF Valuation
Transparent DCF models put American Eagle Outfitters, Inc. (AEO)'s fair value in a range of $26.07 – $30.39 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $17.82 sits below that range — by these conservative assumptions it screens as potentially undervalued.
Reverse DCF: at today's $17.82, the market is pricing in roughly -2.3%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of -44.4%. The price is betting on acceleration above its track record.
Current Price
$17.82
Fair-Value Range
$26.07 – $30.39
Market-Implied Growth
-2.3%/yr
vs -44.4% 5Y actual
AEO DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $315.7M · 0.17B shares · net debt $79.2M
Estimated Fair Value
$30.39
+70.6% vs $17.82
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $17.82; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $37.89 | $39.85 | $42.18 | $44.97 | $48.38 |
| 9.0% | $32.47 | $33.82 | $35.37 | $37.18 | $39.32 |
| 10.0% | $28.35 | $29.31 | $30.39 | $31.63 | $33.06 |
| 11.0% | $25.11 | $25.81 | $26.60 | $27.48 | $28.48 |
| 12.0% | $22.50 | $23.03 | $23.61 | $24.26 | $24.98 |
About American Eagle Outfitters, Inc.
American Eagle Outfitters, Inc. (AEO) operates as a distinct fashion and lifestyle retail enterprise, offering a wide array of clothing, accessories, and personal care items. Its primary offerings are sold under the established American Eagle and Aerie labels. The American Eagle brand features various jeans, specialized apparel, and fashion accessories catering to both men and women. Conversely, the Aerie brand targets female customers with its collections of intimates, general clothing, activewear, swimwear, and personal care products. Additionally, AEO markets graphic t-shirts and other apparel via its Tailgate brand, and provides upscale menswear through its Todd Snyder New York division. As of January 29, 2022, the company managed a significant physical retail presence, including 880 American Eagle stores, 244 standalone Aerie boutiques, and 5 Todd Snyder outlets, located across the United States, Canada, Mexico, and Hong Kong. Globally, AEO extends its reach by shipping to 81 countries through its dedicated e-commerce sites: ae.com, aerie.com, and toddsnyder.com. Its merchandise is also distributed through 260 licensed establishments operating in 28 nations. Established in 1977, American Eagle Outfitters, Inc. is headquartered in Pittsburgh, Pennsylvania.
- Sector
- Consumer Cyclical
- Industry
- Apparel - Retail
- CEO
- Jay L. Schottenstein