In the ever-evolving stock market, where large-cap companies dominate the spotlight, small-cap companies often present unique growth opportunities for investors. The Russell 2000 Index (IWM) includes several high-potential companies that have caught analysts’ attention. Among them, two stocks, FTAI Aviation (FTAI) and Abercrombie & Fitch (ANF), stand out for their strong fundamentals and bullish analyst ratings. According to analysts, FTAI and ANF stocks could surge by around 80% from current levels.
In context, the Russell 2000 Index tracks 2,000 U.S. small-cap stocks, serving as a key benchmark for these companies. Let’s take a closer look at these Russell 2000 stocks that analysts believe are well-positioned for significant growth.
FTAI Aviation
FTAI Aviation, previously known as Fortress Transportation and Infrastructure Investors LLC, provides full-service aftermarket maintenance and power solutions for widely used commercial jet engines. With a niche focus on aircraft leasing and engine maintenance, it benefits from rising air travel demand. Its high-margin services, proprietary engine technology, and long-term contracts offer a strong competitive edge and stable cash flow.
In 2024, the company reported strong financial results with adjusted EBITDA reaching $252 million in Q4 2024, up 55% year-over-year. For the full year, adjusted EBITDA totaled $862.1 million, marking a 44% increase from 2023. Notably, the company’s Aerospace Products division saw significant growth, with net income reaching $346 million, up 92% year-over-year, while adjusted EBITDA surged 138%.
Is FTAI a Good Stock to Buy?
Turning to Wall Street, five-star-rated analyst Stephen Trent from Citi maintained his Buy rating on the FTAI stock. Trent placed the company on a “90-day positive catalyst watch,” expecting strong Q1 results and guidance from FTAI. Trent added that new third-party investors in FTAI’s aircraft leasing partnership could strengthen operations and validate its strategy, while announcements of new engine module customers may serve as positive stock catalysts.
Overall, analysts have a Strong Buy consensus rating on FTAI stock based on 10 Buys and one Hold recommendations. The average FTAI share price target of $188.36 implies an 80.6% upside potential.
Year-to-date, FTAI stock has declined by 28%.
Abercrombie & Fitch
Abercrombie & Fitch Co. is a global specialty retailer known for its premium casual wear and lifestyle apparel. The company delivered strong FY24 results but issued lackluster guidance for FY25, impacting investors sentiment on the stock. Since reporting earnings in early March, ANF shares have fallen over 17%.
Speaking of results, the company achieved record performance in FY24, with net sales rising 16% to $4.95 billion and operating income surging 53% to $741 million. Looking ahead, ANF is preparing for a challenging year, warning of weaker annual sales growth and potential softening demand this spring. For FY25, it expects net sales growth of 4% to 6% in Q1 and 3% to 5% for the full year. Moreover, Q1 2025 adjusted EPS guidance of $1.25 to $1.45 falls well short of Wall Street’s $2.01 estimate.
Moreover, the company cited a $5 million impact from U.S. tariffs and noted that margins could be pressured by higher freight costs and increased promotions to clear excess inventory.
Is Abercrombie a Good Stock to Buy?
Despite the gloomy guidance, analysts remain optimistic about Abercrombie Fitch’s long-term prospects, though many have cut their 12-month price targets.
Five-star Citi analyst Paul Lejuez lowered his price target on ANF stock from $160 to $135 while maintaining a Buy rating, implying nearly 70% upside from current levels. The downgrade reflects high inventory and near-term margin pressure at the Abercrombie & Fitch brand. However, with Hollister performing well, Lejuez sees a compelling risk/reward opportunity.
Similarly, Raymond James lowered its price target from $124 to $110, citing freight-driven gross margin pressure. However, it sees the FY25 revenue forecast as achievable, supported by Hollister’s strength, SG&A control, and the new CFO.
Overall Wall Street analysts have a Strong Buy consensus rating on ANF stock based on seven Buys, two Holds, and zero Sells assigned in the last three months. The average Abercrombie & Fitch share price target of $146.25 implies an 83.3% upside potential.
Conclusion
Both Russell 2000 stocks highlighted by analysts demonstrate growth potential, supported by solid financial performance, strategic expansion, and segment growth. While market uncertainties remain, their resilience and long-term outlook could appeal to growth-focused investors.
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