On Wednesday, Jefferies, a global investment banking firm, increased its price target for Abercrombie & Fitch Co. (NYSE:ANF), a leading apparel retailer, from $155.00 to $215.00 while maintaining a Buy rating on the stock. The adjustment follows Abercrombie & Fitch's reported earnings, which surpassed expectations for both revenue and earnings per share.
The company's recent financial results showed a 22% year-over-year (YoY) increase in first-quarter sales, and operating margin (OM%) expanded by approximately 810 basis points YoY. In light of these strong performance indicators, Abercrombie & Fitch's management has revised their full-year guidance upwards, now anticipating around a 10% sales growth and an operating margin of about 14%—a level not seen since before 2010.
The firm's decision to raise the price target is based on the belief that Abercrombie & Fitch will continue to generate robust sales and margin growth through the fiscal year 2025. The company's demonstrated strength across all brands and regions has contributed to this positive outlook.
Jefferies has adjusted its own estimates in response to Abercrombie & Fitch's raised guidance and recent performance successes. The firm's analysts expect the retailer to maintain its momentum, leading to the reiteration of the Buy rating and the significant increase in the price target to $215.00.
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