Despite rising interest rates, tightening consumer budgets, and a challenging macroeconomic setup, shares of fashion retailer Abercrombie & Fitch (NYSE:ANF) have had a dream run over the past year with a gain of nearly 291%.
Don't Miss our Black Friday Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
However, ANF shares are under pressure today despite the company posting a better-than-expected performance for the third quarter. In Q3, revenue jumped by 20.4% year-over-year to $1.06 billion. The figure exceeded estimates by nearly $73 million. Additionally, EPS of $1.83 beat expectations by $0.63.
Furthermore, comparable sales rose by 16%, and the operating margin expanded by 1,110 basis points to 13.1%. Driven by this growth, the company also increased its full-year outlook.
For Fiscal Year 2023, ANF expects net sales to increase in the range of 12% to 14%, compared to the prior expectation of a 10% growth. In addition, the operating margin is anticipated to come in at 10% versus the earlier anticipated range of 8% to 9%.
What is the Price Target for ANF Stock?
Despite this performance, the stock remains under pressure today, and analysts see a further potential downside of 5.1% in ANF with a Moderate Buy consensus rating and a $68.71 average price target.
After its impressive price surge, ANF is now trading at a price-to-earnings multiple of 18.5 and a price-to-sales multiple of 3.89. This indicates that ANF stock is now trading at a relatively expensive valuation compared to its peers and, amid the current macro environment, could take a breather before resuming its upward trajectory.
Read full Disclosure
