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Wednesday, May 25, 2016
Connor Campbell - Market Analyst at Spreadex

Stock of the day 25/05/2016 – Abercrombie & Fitch Co

Having weathered the tumultuous start to the year without the kind of wince-worthy plunge that afflicted many a stock (though the company did slip from a 2016 starting price of $27.46 to $23.66 over the first month and a half of the year) things began to pick up for Abercrombie & Fitch in mid-February.

Abercrombie & Fitch Co Chart May 2016 Spreadex Financial Spread Betting
(Source: 25/05/2016)

Climbing all the way to a 14 month high of $29.35 Abercrombie then received a big boost following its fourth quarter update at the start of March. Like-for-like group sales rose by a higher than forecast 1%, with a 4% jump from Hollister overcoming the 2% fall in the company’s namesake brand. The goodwill gained by these figures saw the stock surge to $32.83 by the end of the first week of March, a price it hadn’t seen since October 2014.

Yet Abercrombie quickly began to lose momentum. Across the rest of March the stock couldn’t really build on those post-$32 highs, before a sector-wide decline throughout April saw Abercrombie plunge from $31.53 to $27.21 in the space of a month. Matters failed to improve as May got underway, the stock eventually sinking to a 6 month low of $22.55. Abercrombie & Fitch sits at a current trading price of $24.85 (, 25/05/2016).

In terms of its first quarter results analysts are expected the company to post a loss per share of 51 cents (up from 53 cents in Q1 2015), alongside a reduction in its pre-tax losses from $94 million to $53.98 million year-on-year.

Abercrombie & Fitch Co has a consensus rating of ‘Hold’ with an average target price of $26.
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