Analyst Paul Lejuez from Citi maintained a Buy rating on Abercrombie Fitch and keeping the price target at $135.00.
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Paul Lejuez has given his Buy rating due to a combination of factors that, in his view, make the recent concerns transitory rather than structural. He acknowledges that Hollister’s latest comparable sales growth came in below expectations and slowed from the prior quarter, but attributes much of this weakness to adverse winter weather, noting that trends appeared to recover once conditions normalized, suggesting the brand’s customer appeal remains intact.
He also addresses investor worries about the new ERP system, which is expected to briefly weigh on first‑quarter sales and margins, but emphasizes that management sees this disruption as limited to a short period. In contrast, he highlights Abercrombie & Fitch’s strong free‑cash‑flow profile, substantial ongoing share repurchases, and relatively low valuation multiples versus his forward estimates, leading him to conclude that the stock’s current price embeds overly pessimistic expectations and offers compelling upside potential.
In another report released yesterday, Telsey Advisory also maintained a Buy rating on the stock with a $125.00 price target.