J.P. Morgan Comments on Abercrombie & Fitch (ANF)

J.P. Morgan released a report earlier on retailer Abercrombie & Finch ANF. In the report, J.P. Morgan was hopeful that the company could meet its management goals. J.P. Morgan states, “ANF's margins have troughed and management's goal of 15% operating margin should be achievable in the next few years as the company accelerates its high-margin international business while its mature domestic stabilizes. The company has lost over 30% of its sales productivity from peak 2007 levels, and finally with sharper opening price points and more compelling promotions, ANF posted some of the better comps in retail in 2010, with positive comp momentum continuing into 2011. Assuming the company reaches its $7.5 billion sales goal by 2015 at 15% margins, earnings power would be around $8.00.” J.P. Morgan currently has a Neutral rating on Abercrombie & Fitch and the price target of $76.00. The company traded up 3.66% yesterday to close at $73.28 on the day.