Abercrombie & Fitch Downgraded, Price Target Slashed At Wunderlich

Shares of Abercrombie & Fitch were falling 3.4% in light, premarket trade Monday, after Wunderlich Securities slashed its rating to sell from hold on the belief that hopes for a turnaround are overdone. Analyst Eric Beder also cut his stock price target falls to $17 from $30. He wrote in a note to clients that he believes both Abercrombie and Hollister have been unable to retain any pricing power as they switched away from logo-driven products. He also believes dollar strength will hurt its international business, as well as its domestic business that is "highly dependent" on tourist-driven traffic. "When combined with weak management credibility, we believe the pieces are in place for material disappointments when 4Q results are announced on March 4," Beder wrote. The stock has lost 13% over the past three months through Friday, compared with a 1.2% gain in the S&P 500.