Last week, you might have seen that Abercrombie & Fitch Co. (NYSE:ANF) released its full-year result to the market. The early response was not positive, with shares down 9.7% to US$119 in the past week. Abercrombie & Fitch reported in line with analyst predictions, delivering revenues of US$4.3b and statutory earnings per share of US$6.22, suggesting the business is executing well and in line with its plan. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from Abercrombie & Fitch's eight analysts is for revenues of US$4.53b in 2025. This would reflect an okay 5.9% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 16% to US$7.55. In the lead-up to this report, the analysts had been modelling revenues of US$4.44b and earnings per share (EPS) of US$6.74 in 2025. So it seems there's been a definite increase in optimism about Abercrombie & Fitch's future following the latest results, with a nice increase in the earnings per share forecasts in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 11% to US$137per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Abercrombie & Fitch at US$155 per share, while the most bearish prices it at US$103. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Abercrombie & Fitch's growth to accelerate, with the forecast 5.9% annualised growth to the end of 2025 ranking favourably alongside historical growth of 3.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.2% annually. Abercrombie & Fitch is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Abercrombie & Fitch's earnings potential next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Abercrombie & Fitch going out to 2027, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Abercrombie & Fitch that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.