12 Best Consumer Discretionary Stocks to Buy According to Analysts

1. Abercrombie & Fitch Co. (NYSE:ANF)

Upside Potential: 75%

Number of Hedge Fund Holders: 51

Abercrombie & Fitch Co. (NYSE:ANF) is a global, multi-brand, digitally-led omnichannel retailer. The company offers a wide range of apparel, personal care products, and accessories for men, women, and kids. These products are primarily sold through its company-owned stores and digital channels, as well as through various third-party arrangements. The company’s brands include Abercrombie & Fitch, Abercrombie kids, Hollister, and Gilly Hicks.

Carillon Tower Advisers, an investment management company, highlighted Abercrombie & Fitch Co. (NYSE:ANF)’s weaker performance in its “Carillon Eagle Small Cap Growth Fund” Q3 2024 investor letter. Despite this, the firm remains optimistic around the valuation and continues to hold a stake as of December 2024. The firm noted:

“The stock lagged during the period despite reporting strong quarterly results and lifting forward guidance. We believe the performance is more a result of elevated investor expectations than any weakening of the underlying fundamentals, which we believe continue to remain strong.”

On January 13, the company provided a Q4 business update. It raised the Q4 2024 net sales growth outlook to a range of 7%-8% from the previous range of 5%-7%, and revised the FY 2024 sales growth forecast to 15%, up from the earlier 14%-15%, while maintaining its operating margin outlook. Despite Abercrombie & Fitch Co. (NYSE:ANF) shares dropping 16% that day, a Jefferies analyst reiterated his Buy rating and $220 price target, viewing the pullback as a buying opportunity. He believes the company’s plan for operating income and EPS to grow faster than sales is credible based on his analysis. Therefore, he remains positive on the stock.

While we acknowledge the potential of ANF to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ANF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

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