Most of the analysts providing recommendations for Abercrombie & Fitch (ANF) have maintained a “hold” rating for the stock. Of the 16 analysts covering the stock, 56% have recommended a “hold,” 13% have recommended a “buy,” and 31% have recommended a “sell.”
After its fiscal 3Q17 earnings release on November 17, 2017, many analysts increased their target prices for Abercrombie & Fitch. RBC raised its target price from $14 to $16, and BMO raised its target price to $16 from $12. Citigroup increased its target price to $18 from $16, and JPMorgan raised its target price to $12 from $10. Jefferies has increased its target price to $14 from $12, while Deutsche Bank’s target price is now $12 compared to $9 earlier.
Abercrombie & Fitch is undergoing a transformation, which could improve its sales performance. Extensive investments made to overhaul its brand image and boost its e-commerce and omnichannel capabilities could work in the company’s favor. Disciplined cost management is an added advantage.
However, its extensive discounting strategy is leading to lower average per retail, which is weighing down its profitability.
Currently, analysts’ target price for the company is $13.69. That reflects a downside of 19.3% compared to its share price on December 14, 2017.
Are peers in a better situation?
Of the 19 analysts covering American Eagle Outfitters, 53% have given it a “hold” rating. For Gap, 73% of the 26 analysts covering the stock have given it a “hold” rating. For Guess, 75% of the analysts have rated it a “hold.”
Currently, analysts’ target price for American Eagle Outfitters is $16.29, reflecting a 5.5% downside to its share price as of December 14, 2017. For Gap, the mean target price is $28.55, which indicates a 13.9% downside to its share price as of December 14, 2017. For Guess, the target price is $16, implying a 0.4% upside to its share price as of December 14, 2017.
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