By Dhirendra Tripathi
Investing.com – Shares of Abercrombie & Fitch (NYSE:ANF) were up Wednesday on securing upgrades from Jefferies and Argus.
Both raised their ratings for the stock to buy from neutral.
Jefferies (NYSE:JEF) sees the apparel retailer’s stock at $57, higher by 37.5% from the stock’s current level of $41.44.
The brokerage believes years of brand elevation efforts at Abercrombie are beginning to show benefits.
It expects gross margins gains to be stickier than anticipated and sees underappreciated structural benefits to operating margin from occupancy reductions, a point Argus also alluded to.
Argus has a target of $47 for the stock.
Analysts at both Jefferies and Argus pointed out that Abercrombie had moved its focus to digital sales and that now accounts for a majority of its sales.