UPDATE: UBS Downgrades Abercrombie & Fitch (ANF) to Neutral

UBS analyst Jay Sole downgraded Abercrombie & Fitch (NYSE: ANF) from Buy to Neutral with a price target of $37.00 (from $68.00).

The analyst comments "Rising inflation is the main reason we are downgrading ANF: Inflation has become a big Softlines theme over the last two months and is causing us to change our ANF stock thesis. We believe inflation will pressure ANF's sales and margins enough in FY22 to limit the company's earnings from growing y/y and its P/E from expanding. These developments have caused us to lower our Price Target and EPS estimates. Before we thought ANF's FY22 EPS could surprise to the upside and this could get its multiple to re-rate from low levels. Now however, our FY22 EPS forecast is in-line with consensus and we don't envision a catalyst which can drive P/E expansion. We continue to believe management is taking the right actions to turnaround the company, so perhaps the stock will become attractive again at a later date."

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 $34.31 yesterday.

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