Abercrombie & Fitch added to JPMorgan's Positive Catalyst Watch, shares edge up

Investing.com -- Shares in Abercrombie & Fitch (NYSE:ANF ) edged higher in US premarket trading on Friday after analysts at JPMorgan Chase (NYSE:JPM ) added the clothing retailer to its Positive Catalyst Watch list, an indicator of their near-term conviction in a stock.

In a note to clients, the analysts said the company has been boosted by an acceleration in momentum at both its eponymous brand and its Hollister division, particularly during the crucial back-to-school shopping season. Promotional activity across both units has been "more favorable" as well, they said.

They also found the group has seen strength across various "categories, genders, and geographies" heading into its third-quarter earnings despite concerns surrounding a weather-induced industry-wide slowdown.

Meanwhile, the analysts noted that Abercrombie & Fitch's mainly imports US goods via West Coast ports, making it easier for the firm to overcome potential headwinds from a now-ended multi-day strike by dockworkers on the US East and Gulf coasts.

Its supply chains teams have also been able to "navigate" the work stoppage thanks to "advanced visibility" of the situation, the JPMorgan analysts said. The striking workers and the group representing ocean carriers reached a deal on Thursday to suspend the labor action.

The JPMorgan analysts raised their December 2025 share price target by $1 to $195 and reiterated their "Overweight" rating of Abercrombie & Fitch's stock.

"Following marketing [and] merchandising improvements over the last few years, the Abercrombie brand has successfully expanded its customer reach to an 18-40 year old customer demographic, with strong new customer acquisition globally supporting broad-based topline results, in addition to greater full price selling," the analysts said.

In August, Abercrombie & Fitch raised its annual revenue target following higher-than-anticipated quarterly sales, although shares dipped at the time as analysts had expected an even bigger forecast increase.

However, the stock has still performed strongly in 2024, rallying by 52% this year.

Source: Investing.com