Abercrombie & Fitch price target raised to $82 from $78 at Morgan Stanley

Morgan Stanley raised the firm’s price target on Abercrombie & Fitch to $82 from $78 and keeps an Equal Weight rating on the shares. A sales-driven Q1 EPS beat and smaller-than-expected magnitude of the fiscal year guidance reduction were “a positive surprise,” but they came with ongoing A&F banner deceleration and a gross margin miss, the analyst tells investors. The firm thinks the Q1 report “likely fuels bears’ fears of sales/profitability reversion” and subsequent negative EPS revision risk, but adds that this risk “appears mostly appreciated at current levels.”