American Eagle (NYSE:AEO) has bucked the trend of ugly retail stock charts in the past couple of months as a long sideways consolidation has given way to a tremendous rally. The stock is making new highs off of the Q2 earnings reportas comps and margins are flying higher. But at $19, are investors just a little too excited or is this the breakout AEO needed to fuel its next leg higher?
I've been bullish on AEO since last December when shares were going for $15 and in March, I reiterated my bullishness after a strong Q4 report. I said at that time that AEO was good for $20 this year and with the stock knocking on the door to that price, it is certainly time for a reassessment of the value of AEO shares against its ever-improving fundamentals.
