Jefferies has reiterated its 'buy' recommendation on Abercrombie & Fitch, raising its price target from $215 to $220 and expecting EPS to rise by around 7% a year between 2025 and 2027, to $11.86, compared with a consensus of around 4% a year, to $11.17.

The broker explains that he sees several favorable sales factors contributing to an increase in productivity, which he believes implies a potential extension of the apparel chain's gross margin.

Our productivity analysis shows a gap of around 50% between Abercrombie and its peers, so we believe that increasing sales and optimizing the company's costs could help reduce this gap," he continues.

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