Piper Jaffray Reiterates OW Rating on Abercrombie & Fitch

Piper Jaffray is reiterating its Overweight rating on Abercrombie & Fitch Co. ANF shares following the company's strong FQ1 results. “EPS of $0.28 far exceeded PJC's estimate of $0.08 and consensus estimates of $0.12,” Piper Jaffray writes. “The large beat came from 230bps of gross margin expansion and 500bps of expense leverage, which we attribute to strategic promotions, trend-right fashions, and higher volume international stores. “While costs pressures and higher expenses pose headwinds in Q2, we believe continuing sales momentum will be the key to valuation. We raise our FY12E EPS from $3.04 to $3.27 and our FY13E EPS from $4.70 to $4.71 but are leaving our $85 price target unchanged.” Abercrombie & Fitch closed Wednesday at $75.69.