Abercrombie & Fitch: Hold Rating Amid Mixed Signals and Market Resilience

Analyst Alexandra Straton of Morgan Stanley maintained a Hold rating on Abercrombie Fitch (ANF – Research Report), boosting the price target to $82.00.

Alexandra Straton has given her Hold rating due to a combination of factors influencing Abercrombie Fitch’s current market position. The company’s recent quarterly results, while showing some positive aspects like an earnings per share beat, also highlighted concerns such as a slowdown in the Abercrombie & Fitch banner and a miss in gross margin expectations. These elements contribute to fears of potential sales and profitability reversion, as well as the risk of negative earnings per share revisions.
Despite these challenges, the stock’s depressed valuation suggests that these risks are already largely accounted for by the market. Furthermore, the company’s guidance, although reduced, was better than anticipated, indicating some resilience compared to its peers. Looking forward, the market and analysts, including Straton, are waiting to see if management can achieve the hoped-for improvements in margins and sales. Until more clarity is available, the stock is expected to remain within a certain range, justifying the Hold rating with a price target of $82.

According to TipRanks, Straton is a 4-star analyst with an average return of 7.9% and a 64.57% success rate. Straton covers the Consumer Cyclical sector, focusing on stocks such as On Holding AG, Lululemon Athletica, and Ross Stores.

In another report released today, Barclays also maintained a Hold rating on the stock with a $84.00 price target.