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Argus Turns Bullish On Abercrombie, Sees Upside To $25

Argus Turns Bullish On Abercrombie, Sees Upside To $25
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Abercrombie & Fitch Co. (NYSE: ANF) bottomed last year at $8.81, but shares have since rebounded to nearly $20.

Despite the more than doubling in value, at least one Wall Street analyst sees further upside ahead on the basis of the retailer's turnaround plan. 

The Analyst

Argus Research Company's John Eade upgraded Abercrombie & Fitch from Hold to Buy with a $25 price target. 

The Thesis

After five years of weakness in Abercrombie's business, a new management team is righting the ship and a turnaround plan is starting to see results, Eade said in a Friday note. (See the analyst's track record here.) 

Fran Horowitz was appointed as CEO in February 2017, and the company brought in a new chief marketing officer to launch a campaign that emphasizes the brand's historic association with outdoor adventure and exploration. The brand's perception among young consumers has "improved significantly," which should contribute to longer-term market share gains, the analyst said. 

In the meantime, Abercrombie managed to report two consecutive quarters of EPS surprises, which helped the stock rebound to near $20 per share, Eade said. But even at current levels, the stock looks attractive as it continues to trade at a discount to its peers and below historical average multiples, he said. 

Price Action

Shares of Abercrombie & Fitch were trading higher by 3.32 percent at $19.58 after the open Friday. 

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Photo by Urizzato/Wikimedia. 

Latest Ratings for ANF

Jun 2018JP MorganMaintainsUnderweightUnderweight
May 2018WedbushInitiates Coverage OnNeutral
Mar 2018Morgan StanleyMaintainsUnderweightUnderweight

View More Analyst Ratings for ANF
View the Latest Analyst Ratings

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