UBS Maintains a 'Neutral' on Abercrombie & Fitch (ANF); Long-term Brand Strength, Offset By Lack of Visibility on ’12 EPS Target

UBS maintains a 'Neutral' on Abercrombie & Fitch (NYSE: ANF) price target cut from $60 to $52.

UBS analyst says, "While ANF’s brand strength and ability to manage expenses are positives, we remain skeptical of the ‘12 EPS target. While we appreciate that conservative sales assumptions are embedded, there are a few wildcards since the target was launched – namely European macro headwinds, stability of AUR, and what happens to US comps and margins as ANF pulls back on promos. We believe the market is pricing in a more muted (but not dire) scenario. With no news until 4Q, we see the stock as range-bound, but look for visibility on the above to get constructive."

"We prefer TJ Cos (NYSE: TJX) for Europe exposure, given the recent improvement there...Lowered Q4 estimate to $1.47 from $1.59 based on more gross margin erosion." (UBS also cuts FY EPS estimate from $2.90 to $2.63)

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 $48.10 yesterday.

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