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Teen clothing retailer Abercrombie & Fitch Co. ( ANF ) on Wednesday caught a big upgrade from analysts at Piper Jaffray.

The firm boosted its rating on ANF from "Neutral" to "Overweight" and lifted its price target from $33 to $40. That new target suggests a 21% upside to the stock's Tuesday closing price of $32.96.

A Piper Jaffray analyst 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 shares rose 75 cents, or +2.3%, in premarket trading Wednesday.

The Bottom Line
Shares of Abercrombie & Fitch ( ANF ) have a 2.12% dividend yield, based on last night's closing stock price of $32.96. The stock has technical support in the $29-$30 price area. If the shares can firm up, we see overhead resistance around the $37-$39 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 .

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