Abercrombie & Fitch Upgraded to “Buy” at Brean Murray; Valuation Attractive (ANF)


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Teen clothing retailer Abercrombie & Fitch Co. ( ANF ) on Monday caught a big upgrade from analysts at Brean Murray Carret & Co.

The firm said it boosted its rating on ANF to "Buy" with a $65 price target, suggesting a 31% upside to the stock's Friday closing price of $49.61.

A Brean Murray analyst commented, "…we believe now is an apt time to become more aggressive in ANF for a number of reasons: 1) after entering 1Q with materially too much inventory, we believe a warmer March has allowed the company to become more right sized in terms of product exposure and should position them to be more strategic going forward; 2) we believe both the market and costing environments will be material positives going forward in FY13; 3) on a cash adjusted basis the company is, by far, the cheapest of the A's and, in our opinion, the player with the most rational domestic and international unit story; and 4) on a technical basis, the risk/reward is compelling."

Accordingly, the firm boosted its earnings estimates for ANF through 2014. Abercrombie shares rose 79 cents, or +1.6%, in premarket trading Monday.

The Bottom Line
Shares of Abercrombie & Fitch ( ANF ) have a 1.41% dividend yield, based on Friday's closing stock price of $49.61. The stock has technical support in the $45 price area. If the shares can firm up, we see overhead resistance around the $53-$55 price levels.

Abercrombie & Fitch Co. ( ANF ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.0 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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