Abercrombie & Fitch Catches Retail Attention After Barclays Raises Price Target On Hollister Momentum

• Barclays noted that the company matched estimates on sales and beat on earnings, driven by continued strength at Hollister, with 15% comparable sales growth.
• The firm said that it sees strong momentum for Abercrombie heading into the holiday season.
• Morgan Stanley on Wednesday raised the firm's price target on Abercrombie & Fitch to $95 from $78 and maintained an ‘Equal Weight’ rating.

Abercrombie & Fitch was one of the top-trending tickers on Stocktwits on Friday after Barclays raised the firm's price target, noting the company's third-quarter results this week showcased the continued strength of its Hollister brand.

Barclays raised its price target on Abercrombie & Fitch to $94 from $84 and maintained an ‘Equal Weight’ rating, according to TheFly. The firm noted that the company matched estimates on sales and beat on earnings, driven by continued strength from Hollister with 15% comp sales

Barclay said that it sees strong momentum for Abercrombie heading into the holiday season.

Abercrombie’s Better-Than-Expected Q3 Results

On Tuesday, the company’s third-quarter net sales rose 7% to $1.29 billion, compared with Wall Street estimates of $1.28 billion, according to data from Fiscal AI. Abercrombie’s quarterly adjusted earnings per share came in at $2.36, compared with expectations of $2.17.

Abercrombie also raised the lower end of its annual net sales and profit forecasts heading into the holiday season, betting on growing demand for its namesake brand and Hollister’s products.

Analysts’ Take

Morgan Stanley on Wednesday raised the firm's price target on Abercrombie & Fitch to $95 from $78 and maintained an ‘Equal Weight’ rating. The third-quarter beat "surprised to the upside,” and the firm leaves the report more constructive as Abercrombie’s financial profile "may be structurally better than we thought," Morgan Stanley said.

UBS analysts noted that Abercrombie's results and improved guidance highlight its strong fundamentals and noted that the firm sees potential for an earnings per share (EPS) compound annual growth rate of 14% following FY25.

Retail sentiment on Abercrombie remained unchanged in the ‘bullish’ territory, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.

Shares of Abercrombie have declined by over 36% this year.

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Also See: From Walmart To Best Buy, Retailers See A Solid Start To Holiday Quarter – But Consumers Are Waiting For Discounts