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The analysts told investors that they see the company posting a big second-quarter beat for earnings and revenue while they also see the clothing retailer raising guidance.
“We model 2Q EPS of $0.32 vs cons $0.14 based on sales +8% (vs cons +4%) w/ A&F comps +15% (vs cons +10%) and Hollister comps +1% (vs cons -1%),” wrote analysts.
“We expect mgmt to raise F23 guidance from the current implied guidance range of ~$2.00-2.50 to something close to $2.25-2.75, well above cons $2.07 but below buyside expectations (which we believe are $3.00+).”
Citi believes ANF is performing well and sees potential upside to its current F23E forecast for the company. Even so, analysts explained that they remain cautious near term “given positioning/expectations with shares +70% since 1Q EPS on 5/23.”
“We note shares are still cheap on an EV/EBITDA basis at just 4.5x our F24E, and ANF remains one of our top Neutral-rated stocks in our rank order,” the analysts concluded.
