Shares of Abercrombie & Fitch Co. (NYSE:ANF) surged 2.2% to $145.29 in early trading on Friday following an upgrade from Citi, which raised its rating from "neutral" to "buy."
The investment bank noted that the recent selloff presents a valuable opportunity to invest in what it described as "a unique asset."
This comes after ANF shares plummeted 17% on Wednesday, closing at $138.31, despite the retailer's second-quarter earnings beating expectations and a raised sales forecast.
Citi, however, highlighted the strong market position Abercrombie & Fitch has secured as a market share leader, suggesting that the company's 2024 earnings per share (EPS) guidance is conservative.
Citi's upgrade was bolstered by several factors, including the strength of the Hollister brand, potential for global store expansion, a solid balance sheet, and an upcoming ramp-up in stock repurchases.
Additionally, the firm emphasized the stock's attractive valuation compared to lower-growth peers and maintained a price target of $190.
Among the nine brokerages covering Abercrombie & Fitch, four rate the stock as a "strong buy" or "buy," with the median price target also set at $190, according to LSEG data.
Meanwhile, Abercrombie & Fitch's share price has gained over 61% year-to-date.