It's been a sad week for Abercrombie & Fitch Co. (NYSE:ANF), who've watched their investment drop 16% to US$86.03 in the week since the company reported its yearly result. Results were roughly in line with estimates, with revenues of US$4.9b and statutory earnings per share of US$10.69. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Abercrombie & Fitch

After the latest results, the nine analysts covering Abercrombie & Fitch are now predicting revenues of US$5.18b in 2026. If met, this would reflect a credible 4.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to reduce 3.2% to US$10.89 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$5.21b and earnings per share (EPS) of US$11.15 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The average price target fell 19% to US$143, with reduced earnings forecasts clearly tied to a lower valuation estimate. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Abercrombie & Fitch analyst has a price target of US$171 per share, while the most pessimistic values it at US$110. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Abercrombie & Fitch's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 4.7% growth on an annualised basis. This is compared to a historical growth rate of 7.8% over the past five years. Compare this to the 153 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.0% per year. So it's pretty clear that, while Abercrombie & Fitch's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Abercrombie & Fitch. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Abercrombie & Fitch's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Abercrombie & Fitch going out to 2028, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.