Abercrombie & Fitch price target lowered to $135 from $160 at Citi

Citi lowered the firm’s price target on Abercrombie & Fitch to $135 from $160 and keeps a Buy rating on the shares following the Q4 report. The company beat consensus estimates, driven by stronger sales, while gross margin was weaker due to higher promotions and freight costs, the analyst tells investors in a research note. The firm cites high inventory and near-term margin pressure at the Abercrombie & Fitch brand for the target cut. However, with Hollister comping “very strongly,” the shares offer a favorable risk/reward at current levels, contends Citi.