Piper Jaffray Remains Bullish on Abercrombie & Fitch (ANF) as Denim Pricing Shows Signs of Stability

Piper Jaffray reiterated an Overweight rating and $27.00 price target on Abercrombie & Fitch (NYSE: ANF) on improving environment for casual denim-based fashion.

Analyst Neely Tamminga commented, "Over the past five key weeks of back-to-school volume, we've observed denim pricing at or above the prior year's levels--a key sign of stability in our view. The street appears to have settled into a consensus comp estimate for FQ3 at about (2.3%) versus our published estimate of (4%); if pricing momentum holds and overall traffic and demand for denim ensues, we could see upside to sales. Similarly, the consensus gross margin rate of 62.3% and our estimate of 62.2% could see upside. We note that for each 100 basis point of comp improvement and 100 basis point improvement in gross margin, FQ3 EPS could improve by $0.05 and $0.07 on our published $0.23 estimate."

For an analyst ratings summary and ratings history on Abercrombie & Fitch click here. For more ratings news on Abercrombie & Fitch click here.

Shares of Abercrombie & Fitch closed at $20.45 yesterday.

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