Citi Provides Color on Abercrombie & Fitch, Buy

Citi provided color on Abercrombie and Fitch ANF. In a research report published today, Citi states, "The quarter hinges on the back-to-school floorset in July but we're less convinced that ANF can improve its AUR to more fully offset higher costs. As a result, we are lowering our 2Q estimate to $0.25, which assumes a +5% comp and a (200)bps drop in the GM. ANF has multiple levers to exceed full year consensus and remains an exciting margin story for 2012 given its growing international business – but we expect shares to be rangebound near term as investors assess the competitive landscape for 2H11." At the moment, Citi has a Buy rating and a price target of $86 placed on the company's stock. On Monday, Abercrombie & Fitch added 0.8% to its value to trade around $65.61.