UPDATE: Piper Jaffray Upgrades Abercrombie & Fitch to Overweight on Brand Equity Stability

Piper Jaffray raised its rating on Abercrombie & Fitch

from Neutral to Overweight and increased its price target from $33 to #40. Piper Jaffray commented, "Brand share among teens has stabilized, alleviating a key concern to our prior thesis. Our upgrade may prove early; we think a pathway to business model recovery will extend over many, many quarters and a cycle of near-term estimate revisions is possible. We have reduced our FY14 EPS to $2.45, reflecting continued comp pressure and a basing of margins as inventory and cost rationalization efforts take hold. With stability in brand equity, we think investors can focus on scenarios for operating performance and apply a risk-revised multiple. … As the earnings trajectory is established and visibility improves, we think shares can trade higher from current levels." Abercrombie & Fitch closed at $33.43 on Tuesday.