What Happened?

Shares of young adult apparel retailer Abercrombie & Fitch (NYSE:ANF) jumped 9.1% in the morning session after JPMorgan analyst Matthew Boss added the stock to its positive catalyst watch list. The analyst also raised the stock's price target and third-quarter earnings estimate. Boss cited the reason for the upgrade, adding, "Its brands, which include Hollister, showed momentum during the recent back-to-school shopping season."

Is now the time to buy Abercrombie and Fitch? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Abercrombie and Fitch’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 4 months ago when the stock gained 27% on the news that the company reported a "beat and raise" quarter. First quarter results blew past analysts' revenue and EPS expectations, driven by its insanely high 21% year-on-year same-store sales growth (vs analysts' estimates of 12%). The sales performance was broad-based with Abercrombie brands up 31% while Hollister brands delivered growth of 12%.

On the back of the strong print, the company raised its full-year revenue guidance from 5% growth at the midpoint to 10%, a massive jump. Zooming out, we think this was a fantastic quarter that shareholders will appreciate.

Abercrombie and Fitch is up 59% since the beginning of the year, but at $144.64 per share, it is still trading 24.8% below its 52-week high of $192.34 from June 2024. Investors who bought $1,000 worth of Abercrombie and Fitch’s shares 5 years ago would now be looking at an investment worth $10,066.

Today’s young investors likely haven’t read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.