J.P. Morgan Neutral On Abercrombie & Fitch Co. (NYSE)

J.P. Morgan Chase & Co. has a Neutral rating and a $55 price target on shares of Abercrombie & Fitch Co. ANF. It's raising its estimates after December same-store-sales. In a note sent to clients, J.P. Morgan writes, "Our 2010 estimate of $2.02 assumes 7% comps and margins at 8.1%, up 320 bps. Our 2011 estimate of $2.90 is based on 5% comps and margins at 10.1%, up 200 bps. The ANF story continues to be about the fastest growing international business in our universe along with stabilization of the domestic results, and we think the buy-side's $3.00+ in earnings in 2011 followed by close to $4 for 2012 could be realistic. Capex is coming down for 2010, and we expect the company to end the year with almost $12 in cash/share. ANF is buying back stock for the first time since 1Q08 (669,000 shares in 3Q), and we expect the company to continue buying back shares as long as $350 mm in cash cushion is being maintained (we estimate $950 mm in cash at the end of 2010)." Shares of ANF lost $1.82 yesterday to close at $53.53.