Citi expects Abercrombie & Fitch to post a 'big beat'
Citi analysts lifted the price target on Abercrombie & Fitch (NYSE:ANF) to $45 from $33, maintaining a Neutral rating on the stock in a note to clients Tuesday.
The analysts told investors that they see the company posting a big second-quarter beat for earnings and revenue while they also see the clothing retailer raising guidance.
«We model 2Q EPS of $0.32 vs cons $0.14 based on sales +8% (vs cons +4%) w/ A&F comps +15% (vs cons +10%) and Hollister comps +1% (vs cons -1%),» wrote analysts.
«We expect mgmt to raise F23 guidance from the current implied guidance range of ~$2.00-2.50 to something close to $2.25-2.75, well above cons $2.07 but below buyside expectations (which we believe are $3.00+).»
Citi believes ANF is performing well and sees potential upside to its current F23E forecast for the company. Even so, analysts explained that they remain cautious near term «given positioning/expectations with shares +70% since 1Q EPS on 5/23.»
«We note shares are still cheap on an EV/EBITDA basis at just 4.5x our F24E, and ANF remains one of our top Neutral-rated stocks in our rank order,» the analysts concluded.
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