UBS Maintains a 'Neutral' on Abercrombie & Fitch (ANF); Near-Term Headwinds Keep Us Sidelined, But Long-Term Profile Improving

UBS maintains a 'Neutral' on Abercrombie & Fitch (NYSE: ANF) price target raised from $44 to $49.

UBS analyst says, "We believe that US store closures (180 more by ‘15) coupled with the higher margin profile of Europe/top 250 US stores plus the outsized DTC margins will help lift the margin profile of ANF over time. However, trends in the US will dictate performance for now; visibility on comps remains low (US and abroad) vs. tougher compares and inventory remains significantly elevated. Despite a lowered EPS bar, this could mean incremental volatility to estimates (each comp pt is ~$0.20 to EPS). We therefore look for comp stabilization to warm up to ANF."

UBS maintains FY13 EPS estimate fo $3.53, but lowers FY14 from $4.94 to $4.66.

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 $48.48 yesterday.

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