ANF - Abercrombie & Fitch cut to Hold at Argus on margin concerns

2023-04-12 07:43:52 ET

Abercrombie & Fitch ( NYSE: ANF ) slipped in premarket trading on Wednesday as Argus pulled its recommendation on the stock.

While the firm’s analysts indicated investments in marketing, digital and omnichannel capabilities, and right-sizing of retail locations is prudent, the stock appears “fairly valued” at present against a spate of headwinds. Namely, inflationary pressure and a pullback in consumer spending is likely to hamper any growth for shares, in their view.

“Abercrombie has struggled to expand margins amid inflation and currency headwinds, and cautious consumer spending has weighed on sales growth,” the downgrade explained.

The team added that the stock could be returned to a Buy rating “if margins improve and the company resumes dividend payments” in the future. Shares of Abercrombie & Fitch ( ANF ) slid 1.07% in premarket trading.

Read more on the company’s most recent earnings result .

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