UPDATE: Sterne Agee Upgrades Abercrombie & Fitch to Buy on Strong Q3

Sterne Agee raised its rating on Abercrombie & Fitch

from Neutral to Buy and increased its price target from $37 to $54. Sterne Agee commented, "We are upgrading ANF to Buy from Neutral, as we believe Q3 represents a turning point, with heightened fashion offerings, tighter inventory controls, the start of benefits of lower average costs and hints of major expense cuts to come. We are increasing our FY12-FY14 estimates to $3.04/$3.53/$4.13 from $2.43/$2.72/$3.35 and raising the target to $54 (15.3x FY13 and 13x FY14) from $37. Average forward-year P/E over the last 5 years was 17.8x. ANF stock is still 22% below prices reached in May." Abercrombie & Fitch closed at $41.92 on Wednesday.