Financial Trading Blog
Stock of the day 30/08/2016 – Abercrombie & Fitch Co
It’s been a rough few years for Abercrombie. Back in 2007 the stock was trading at all-time highs of nearly $85; flash forward just shy of a decade and the company is worth around a quarter of that price, the stock currently sitting at $22.95 (IT-Finance.com, 30/08/2016).
(Source: IT-Finance.com 30/08/2016)
At the start of 2016, however, it seemed things were looking up for Abercrombie. After opening at $26.66 the stock had climbed to $32.82 by the start of March, with that 16 month high struck in part thanks to an unexpected increase in fourth quarter sales.
However Abercrombie couldn’t remain at this 2016 peak for long, and by the beginning of April things had begun to go south for the stock. Its gradual decline (around $7 per share in 6 weeks) only accelerated in the aftermath of its first quarter report on May 26th. Plunging nearly 16% in a single session Abercrombie posted a 3% fall in revenue alongside a quarterly loss of $40 million, with like-for-like sales at its titular brand suffering an 8% slide (against the 0.6% decline forecast).
Things aren’t expected to have improved for Abercrombie in the second quarter, a fact made all the more worrying considering the 15%-surge inspiring success of Urban Outfitters over the same period. Analysts are forecasting a loss of 20 cents per share against the 12 cents per share profit seen this time last year, with revenue estimated to drop by 4.3% to $782.6 million, marking a 14th consecutive quarter of sliding sales.
Abercrombie & Fitch Co has a consensus rating of ‘Hold’ with an average target price of $24.52.
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