William Blair analyst Dylan Carden has maintained their neutral stance on ANF stock, giving a Hold rating on February 21.
Dylan Carden has given his Hold rating due to a combination of factors impacting Abercrombie & Fitch’s performance. The company reported better-than-expected sales and earnings per share for the quarter, but the outlook for the first quarter and the full year suggests potential challenges. The A&F brand’s sales were below expectations, and the gross margin was weaker, reflecting a more promotional approach early in the year. This has led to a first-quarter operating margin guide that falls short of expectations.
Carden notes that there is a risk of negative comparable sales for the A&F brand, which could impact the full-year guidance. The shares are currently valued at 8.5 times the midpoint of the new 2025 EPS range, which may seem attractive, but there is still risk if the brand’s performance declines further. Despite a high free cash flow yield and a significant buyback authorization, these factors contribute to the Hold rating as the potential risks and uncertainties balance out the positive aspects.
In another report released on February 21, Morgan Stanley also maintained a Hold rating on the stock with a $114.00 price target.
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