Previous articles and comments on AEO here.
I'm anticipating more fall out from the US consumer this fall and will likely buy more AEO at hopefully less than $10/share. My target price is $25/share ((assuming operating margins of 20% and 10% top line sales growth over the next 5 years) with a 18 month investment horizon. I'm not interested in a long term hold for this company because:
- it has no economic moat (durable competitive advantage)
- it is a fairly rapidly changing biz (fashion) known for fickle consumer behaviour
- only a modest dividend to keep me entertained while I wait
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