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Abercrombie & Fitch (ANF) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
PerkinElmer (PKI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Abercrombie & Fitch (ANF) closed at $27.86 in the latest trading session, marking a +1.36% move from the prior day. This change outpaced the S&P 500's 0.88% gain on the day. At the same time, the Dow added 0.55%, and the tech-heavy Nasdaq gained 1.32%.

Heading into today, shares of the teen clothing retailer had gained 10.58% over the past month, outpacing the Retail-Wholesale sector's gain of 4.72% and the S&P 500's gain of 3.96% in that time.

Wall Street will be looking for positivity from ANF as it approaches its next earnings report date. The company is expected to report EPS of -$0.44, up 21.43% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $733.19 million, up 0.31% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.39 per share and revenue of $3.68 billion. These totals would mark changes of +20.87% and +2.38%, respectively, from last year.

Any recent changes to analyst estimates for ANF should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. ANF is currently a Zacks Rank #1 (Strong Buy).

Valuation is also important, so investors should note that ANF has a Forward P/E ratio of 19.77 right now. For comparison, its industry has an average Forward P/E of 13.06, which means ANF is trading at a premium to the group.

Also, we should mention that ANF has a PEG ratio of 1.3. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ANF's industry had an average PEG ratio of 1.28 as of yesterday's close.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 86, putting it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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