UBS Stays Positive on American Eagle Outfitters (AEO), Keeps Buy Rating

American Eagle Outfitters, Inc. (NYSE:AEO) is one of the 10 Best Small-Cap Stocks to Buy According to Billionaires. On July 10, UBS reiterated its “Buy” rating for American Eagle Outfitters, Inc. (NYSE:AEO) with a price target of $19.

The investment firm believes that the company’s Aerie brand can be a key driver of future growth.

UBS Stays Positive on American Eagle Outfitters (AEO), Keeps Buy Rating

A close-up of a customer trying on a stylish Aerie item, smiling with satisfaction.

UBS expects Aerie to drive “surprising top-line growth” for American Eagle Outfitters, Inc. (NYSE:AEO). The firm projects the company’s earnings per share to grow at a compound annual growth rate of 10% over the next five years.

The firm also noted that American Eagle Outfitters, Inc.’s (NYSE:AEO) earnings growth could cause the stock’s price-to-earnings ratio to return to its past five-year mean. Based on conversations with investors, UBS believes that the market is being overly negative about the stock.

Additionally, UBS recently attended retail bus tour store visits with American Eagle Outfitters, Inc.’s (NYSE:AEO) management in Chicago. These visits reinforced the firm’s positive stance on the company.

American Eagle Outfitters, Inc. (NYSE:AEO) is an American multinational specialty retailer offering clothing, accessories, and personal care products under its American Eagle and Aerie brands.

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Disclosure: None. This article is originally published at Insider Monkey.