Abercrombie & Fitch Co. (NYSE: ANF) is set to post its fiscal fourth-quarter results Wednesday morning before the markets open. Consensus estimates call for earnings per share (EPS) of $1.16 and $1.17 billion in revenue. The fourth quarter from the previous year had $1.34 in EPS and $1.3 billion in revenue.
The question for this earnings report is whether Abercrombie can turn its fortunes around. The company has been pushing new lows since December, and these lows have become more pronounced as earnings draw nearer. Also, analysts have taken a sour tone with A&F, and the most recent ratings in February have generally downgraded the stock and lowered its price target.
In December, the company announced the immediate retirement of CEO and executive chairman, Michael Jefferies. Following this departure, Arthur Martinez, the non-executive chairman of the board, will become the new executive chairman. He will also head the office of the chairman in conjunction with Chief Operating Officer Jonathan Ramsden and brand presidents Christos Angelides and Fran Horowitz.
Abercrombie & Fitch’s woes have been well known for some time. The company previously lowered its 2015 guidance, and Jeffries’s contract had been extended. Still, the company’s shares were down about 20% so far in 2014 when the broader market was doing much better, but the stock was down much more if you consider the 52-week high was above $45.50. At what point does an on-the-spot and immediate retirement after years of woes really get counted as a retirement?
A couple of analysts weighed in on Abercrombie in the days just before the fourth quarter results were released. Mizuho maintained a Neutral rating and lowered its price target to $27 from $29, implying an upside of 10.6% from Monday’s close of $24.42. Wunderlich maintained a Sell rating and set its price target below consensus at $17, implying a downside of 30.4%.
The 50-day moving average (MA) currently reads at $26.42. The MA has been acting as an overhang for the stock since September and shares have only tested this moving average once in January before receding. The 200-day moving average is well above this level with a reading of $33.92
Towards the end of Tuesday’s trading session, shares were changing hands at $24.14. The stock has a consensus analyst price target of $29.50 with a 52-week trading range is $23.12 to $45.50.
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