Oppenehimer Resumes Coverage on Abercrombie & Fitch at "Outperform" (ANF)

Oppenehimer Resumes Coverage on Abercrombie & Fitch at “Outperform” (ANF)

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Early on Thursday, analysts at Oppenheimer relaunched their coverage on fashion retailer Abercrombie & Fitch Co. (ANF) with a bullish rating due to a number of positive factors.

The analysts rate ANF as “Outperform” and see shares reaching $65. This price target suggests a 36% upside to Wednesday’s closing price of $47.85.

An Oppenheimer analyst noted, “We are relaunching on ANF with an Outperform rating and a $65 price target. ANF is making structural changes to the business—in addition to changes made to merchandising/planning and allocation and a new focus on inventory productivity, the company is in the midst of a comprehensive review to improve efficiencies and reduce expenses. With operating margins in the 8% range for the third year in a row, as international four-wall margins stabilize in the 30% level and domestic four-walls lift from 16%, ANF should be an at least low double digit margin business, or $5.00+ in earnings power. Given its 10% free cash flow yield, capex levels coming down in 2013, and liquidity approaching $1 billion, we wish ANF were more acquisitive on the buyback in 1Q13 (largely timing related), and we think the company is being more opportunistic already in 2Q13. The stock has come in from May peaks with 1Q13 results (down 10%, group down 3%), and we think is less ‘loved’ now.”

Abercrombie shares were down 58 cents, or -1.21%, during morning trading on Thursday. The stock is down -1.29% year-to-date.

The Bottom Line
Shares of Abercrombie & Fitch (ANF) have a dividend yield of 1.67% based on last night’s closing price of $47.85 and the company’s annualized dividend payout of 80 cents per share.

Abercrombie & Fitch Co. (ANF) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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