Argus analysts upgraded Abercrombie & Fitch Company (NYSE:ANF) to Buy from Hold, assigning the stock a $41 per share price target in a note to clients Monday.
The analysts told investors the company has been broadening its offering and transitioning away from larger format stores.
"The company has been transitioning away from larger-format, tourist-dependent flagship locations to smaller stores that cater to local customers, and has broadened its offering to include office and special occasion clothing, as well as active apparel," explained the analysts.
"In response to weaker sales to teenage consumers in 2022, it has also refocused the Abercrombie banner on adults ages 22 to 45," they added.
They also noted that ANF is expanding margins, helped by lower freight costs, while it is also lowering inventories as supply-chain disruptions ease and its digital capabilities "continues to strengthen."