Buy Rating for Abercrombie & Fitch: Hollister’s Strength and Valuation Support Positive Outlook

Analyst Paul Lejuez of Citi maintained a Buy rating on Abercrombie Fitch (ANF – Research Report), retaining the price target of $98.00.

Paul Lejuez has given his Buy rating due to a combination of factors including the strength of Hollister’s performance, which is expected to counterbalance the weaker trends observed in Abercrombie & Fitch. Despite the challenges faced by A&F, such as higher promotions and weaker sales trends, Hollister’s strong comparative sales growth is anticipated to provide a stabilizing effect.
Additionally, the current trading price of Abercrombie & Fitch shares, with a price-to-earnings ratio of 8 times the firm’s below-consensus estimates, suggests that the market has already priced in significant caution. This valuation, combined with the potential for conservative estimates to be exceeded, supports the Buy rating. The analyst also notes that while there are macroeconomic uncertainties, particularly around tariff policies, the overall outlook for the company remains positive, with expected improvements in sales and gross margins in the future.

In another report released on May 19, UBS also maintained a Buy rating on the stock with a $130.00 price target.