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Should You Buy Abercrombie & Fitch (ANF) Ahead of Earnings?

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Investors are always looking for stocks that are poised to beat at earnings season and Abercrombie & Fitch Co. (ANF - Free Report) may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.

That is because Abercrombie & Fitch is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is a pretty good indicator of some favorable trends underneath the surface for ANF in this report.

In fact, the Most Accurate Estimate for the current quarter is currently at a loss of 2 cents per share for ANF, compared to a broader Zacks Consensus Estimate of a loss of 5 cents per share. This suggests that analysts have very recently bumped up their estimates for ANF, giving the stock a Zacks Earnings ESP of +62.50% heading into earnings season.

Why is this Important?

A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises, and outperforming the market. Our recent 10-year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank #3 (Hold) or better show a positive surprise nearly 70% of the time, and have returned over 28% on average in annual returns (see more Top Earnings ESP stocks here).

Given that ANF has a Zacks Rank #3 and an ESP in positive territory, investors might want to consider this stock ahead of earnings. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Clearly, recent earnings estimate revisions suggest that good things are ahead for Abercrombie & Fitch, and that a beat might be in the cards for the upcoming report.

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