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How Analysts View Abercrombie & Fitch after Fiscal Q4 Results

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Rating summary

As of March 9, 2018, most of the analysts that covered Abercrombie & Fitch (ANF) maintained a “hold” rating. Of the 16 analysts covering Abercrombie & Fitch stock, 50.0% recommended a “hold,” 19.0% recommended a “buy,” and 31.0% recommended a “sell.” Abercrombie & Fitch reported fiscal 4Q17 results on March 7, 2018. Both its adjusted EPS (earnings per share) and sales beat the analysts’ estimates.

Following the company’s results, several analysts raised the price target. BMO upped the target price to $23.00 from $22.00, and Telsey Advisory Group has revised its price target to $26.00 from $24.00. Also, RBC raised the target price to $27.00 from $24.00. Morgan Stanley also increased the price to $13.00 from the $11.00 projected earlier. Deutsche Bank increased the price target to $17.00 from $14.00 earlier. Jefferies raised the price target to $24.00 from $20 earlier.

Currently, the analysts’ 12-month average target price for the company is $21.92, which reflects a 1.7% downside to its stock price on March 9, 2018.

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Where do peers stand?

Of the 14 analysts covering American Eagle Outfitters (AEO), 50.0% gave it a “hold” rating. For Gap (GPS), ~80.0% of the 25 analysts covering the stock recommended a “hold” rating. Urban Outfitters (URBN) received a “hold” rating from 52.0% of the analysts covering its stock.

Currently, analysts’ target price for American Eagle Outfitters is $20.12, reflecting a ~3.0% upside to the stock price as of March 9, 2018. Gap’s mean target price is $34.38, which indicates a ~4.0% upside to its stock price as of March 9, 2018. Urban Outfitters’ target price is $38.14, implying a 6.3% upside to its stock price as of March 9, 2018.

Valuation overview

On March 9, 2018, Abercrombie & Fitch was trading at a 12-month forward PE (price-to-earnings) ratio of 28.5x. The company is trading at a higher valuation multiple in comparison with its peers. American Eagle Outfitters, Urban Outfitters, and Gap were trading at 12-month forward PE ratios of 13.4x, 16.2x, and 12.6x, respectively, on March 9, 2018.

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