Mizuho Securities Cuts Price Target on Abercrombie & Fitch (ANF) to $15
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Mizuho Securities maintained a Neutral rating on Abercrombie & Fitch (NYSE: ANF), and cut the price target to $15.00 (from $20.00), following the company's 3Q earnings report. 3Q EPS of $0.02 missed the Street’s $0.20 estimate. Gross margin declined (130) bp due to FX, while lower AUC was offset by lower AUR.
Analyst Betty Chen commented, "We are lowering our estimates and PT to $15 (from $20) to incorporate the 3Q miss and expectations for further topline and margin pressure. As management continues to adjust the assortment and reposition A&F (which may be prolonged), there may be few levers to combat traffic headwinds and weakness in Int’l, flagship stores and FX. While modest sequential improvement at Hollister and DTC growth remains bright spots, ANF’s focus on real estate productivity may be unable to stem near-term earnings declines. Given the plethora of challenges, we view shares as fairly valued at 4x EBITDA."
Shares of Abercrombie & Fitch closed at $16.93 yesterday.
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