ANF - Abercrombie & Fitch shares rise on 'positive catalyst' call from Citi

Abercrombie & Fitch ( NYSE: ANF ) shares climbed on Friday after Citi opened a ‘90-day positive catalyst watch’ on the stock.

“There is no question that the business is facing challenges in 2022, including sales pressure in its Hollister business (particularly in Europe) and promotional pressures from an apparel landscape that is over-inventoried. And we do not expect these pressures to inflect any time soon,” the bank’s analysts clarified. “However, with an EV of $700M, the stock currently trades at an EV/sales ratio of 0.20x (near all-time low), which we believe indicates the market is discounting an overly bearish scenario and under-appreciates ANF's balance sheet. “

As such, the analysts indicated that the downside risk for shares is already priced in, allowing for more reward than risk in the near term. A third quarter earnings report due in November was cited as a potential upside catalyst.

Shares rose 3.62% in premarket trading on Friday.

Read more on the apparel retailer’s downbeat earnings report from August .

For further details see: