Earnings Previews: American Eagle Outfitters, iQIYI, Medtronic

Here is a look at three companies on deck to report results first thing Tuesday morning.

American Eagle Outfitters

Specialty retailer American Eagle Outfitters Inc. (NYSE: AEO) has seen its share price plunge by around 55% over the past 12 months. Since posting a 52-week high nearly a year ago, the stock trailed downward until mid-October, when it rang up a new yearly low. Since then, shares have added about 24%, recovering the ground they lost after the company reported second-quarter results

American Eagle has worked to reform its distribution network and has opened its new process to other retailers. The company claims to have doubled the revenue going through the new distribution network. And then there is the rich dividend. Can it continue?

Of 11 analysts covering the stock, just three rate the shares at Buy while another six have Hold ratings. At a recent share price of around $13.25, the stock trades above its median price target of $11.00. At the high price target of $16.00, the implied upside is 20.8%.

Third quarter 2023 revenue is expected to come in at $1.21 billion, which would be up 0.9% sequentially but down 4.7% year over year. Adjusted EPS are forecast to rise by about 450% sequentially from $0.04 to $0.22 and tumble by 71% year over year. For the full year, analysts expect EPS of $0.65, down 70.2%, on sales of $4.92 billion, down 1.9% year over year.

The stock trades at 20.3 times expected 2023 EPS, 14.1 times estimated 2024 earnings of $0.94 and 11.9 times estimated 2025 earnings of $1.11 per share. The stock’s 52-week trading range is $9.46 to $29.19. American Eagle pays an annual dividend of $0.72 (yield of 5.92%), and the total shareholder return for the past year was negative 51.6%.

iQIYI

Shares of Beijing-based online entertainment firm, iQIYI Inc. (NASDAQ: IQ) have dropped by about 60% over the past 12 months. The stock posted a new 52-week low in the last week of October, but since then, the shares have jumped by nearly 40%. The company is following other Chinese tech stocks higher now that the government appears to be reconsidering its strict zero-Covid policy and its crackdown on tech stocks. iQIYI is a subsidiary of Baidu.

Of 20 brokerages covering the stock, 10 have a Buy or Strong Buy rating and nine rate the shares at Hold. At a price of around $2.80 a share, the upside potential to the median price target of $4.24 is 51.4%. At the high target of $9.69, the upside potential is nearly 250%.