Abercrombie & Fitch Co. (NYSE:ANF) Released Earnings Last Week And Analysts Lifted Their Price Target To US$137

Last week, you might have seen that Abercrombie & Fitch Co. (NYSE:ANF) released its full-year result to the market. The early response was not positive, with shares down 9.7% to US$119 in the past week. It was a credible result overall, with revenues of US$4.3b and statutory earnings per share of US$6.22 both in line with analyst estimates, showing that Abercrombie & Fitch is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Abercrombie & Fitch

Following the latest results, Abercrombie & Fitch's eight analysts are now forecasting revenues of US$4.53b in 2025. This would be a modest 5.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 16% to US$7.55. In the lead-up to this report, the analysts had been modelling revenues of US$4.44b and earnings per share (EPS) of US$6.74 in 2025. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a solid gain to earnings per share in particular.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 11% to US$137per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Abercrombie & Fitch at US$155 per share, while the most bearish prices it at US$103. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Abercrombie & Fitch's rate of growth is expected to accelerate meaningfully, with the forecast 5.9% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.2% annually. Abercrombie & Fitch is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Abercrombie & Fitch following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Abercrombie & Fitch. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Abercrombie & Fitch going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for Abercrombie & Fitch that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.