NEW YORK (TheStreet) -- Abercrombie & FitchCo.'s (ANF) - Get Report price target was reduced to $33 from $30 at Keybanc Capital Markets on Tuesday morning. The firm maintained its "overweight" rating on the New Albany, OH-based teen retailer.
Keybanc also decreased its fiscal 2016 earnings estimate to 88 cents from $1.21 per share and its fiscal 2017 estimates to $1.19 from $1.52 per share to reflect a more difficult near-term environment.
"That said, we think ANF is in the early stages of a turnaround and expect greater expense discipline, reduced promotional activity, and new brand initiatives to drive improvements," the firm wrote in a note to investors.
Following the recent bankruptcy announcements from teen retailers PacSun and Aeropostale (AROPQ), Keybanc sees Abercrombie's Hollister brand and Zumiez (ZUMZ) as best positioned to benefit from reduced competition in the longer term.
Based on the firm's analysis, Hollister and Zumiez have the most exposure to malls and shopping centers where PacSun and Aeropostale stores are located.
Additionally, early signs suggest that new brand initiatives at Hollister and to a lesser extent at Abercrombie are resonating with customers, Keybanc noted.
"Product should continue to improve throughout the year, ANF will continue to remodel Hollister stores to the highly productive new format (~50 more this year) and repositioning of the A&F brand will launch in the second half," the firm added.
Shares of Abercrombie are down 0.59% to $20.07 at the start of trading on Tuesday.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C+ on Abercrombie stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, solid stock price performance and impressive record of earnings per share growth.
However, the team also finds that revenues have generally been declining.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: ANF