Abercrombie & Fitch

(ANF) - Get Abercrombie & Fitch Co. Class A Report

shares jumped 6% Tuesday as three Wall Street analysts forecast the teen clothier's new merchandise would break the company out of its funk.

Investors have been hopeful for a while that the retailer will emerge revitalized; since Dec. 19, shares have gained more than 65%. This during a period that saw Abercrombie fall short of sales goals during the all-important holiday season and, at the same time, warn that its earnings for the fourth quarter won't meet analysts' estimates. Abercrombie was an investor favorite briefly in the late '90s but fell out of favor amid inventory overhangs and merchandising missteps.

On Tuesday,

Merrill Lynch

upgraded the stock to near-term buy from near-term accumulate. Two other investment banks,

Wells Fargo Van Kasper

and

Dain Rauscher Wessels

, began coverage on the company with bullish ratings. (Merrill has had a banking relationship with Abercrombie, while the other two firms haven't.)

Tough Going
Abercrombie far below 1999 peak

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The overarching theme of the reports is that Abercrombie, more so than competitors such as the

Gap

(GPS) - Get Gap, Inc. (GPS) Report

, has recognized its fashion missteps of 1999 and 2000 and has aggressively moved to overcome them.

"The spring lines were set in the stores on Friday, and we are pleased with the cleaner men's line and more feminine women's merchandise," wrote

Wells Fargo Van Kasper

analyst Jennifer Black in her report Tuesday. Black initiated coverage with a strong buy rating.

In addition, the company took a lesson from one of the few teen-oriented clothiers that did well in 2000:

Pacific Sunwear

(PSUN)

, which offers teens surfer-inspired duds. Abercrombie's Hollister stores, five of which opened in 2000, markets the West Coast surfer look to 14-to-18-year-olds. The company plans to open 20 stores in 2001 and has said it could grow to 600 to 800 stores over time. "The Hollister stores target a customer base that is arguably the most influential consumer in the market today, as it carries enormous spending power," says Black.

Even after the strong run in Abercrombie shares since mid-December, the stock still trades at a relatively cheap 14 times forward earnings, fans say. And with poor sales in 2000, the company shouldn't have trouble reporting strong same-store sales gains in 2001, according to Lauri Brunner, an analyst Dain Rauscher Wessels who initiated coverage Tuesday with a buy-aggressive rating.