MIT 3 11 - Business Analysis (9 pages)

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Business Analysis



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Business Analysis

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Pages:
9
School:
Massachusetts Institute of Technology
Course:
3 11 - Mechanics of Materials
Mechanics of Materials Documents

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Analysis of Abercrombie Fitch Report by 3one2 comAnalysts Daisy Suryo Gregory Nathan Pei Chun Shang and Jennifer Gold Investment Recommendation MARKET PERFORMER ANF NYSE 3 20 01 52 Week High 52 Week Low Beta 33 50 33 50 8 00 1 23 Revenue FY 2001 Market Capitalization Share Outstanding 1 237 60Mil 3 28Bil 98 80Mil Dividend Yield Institutional Holdings Avg Daily Trading Volume Book Value per Share Return on Equity Est 5 Yrs EPS Growth Rate Industry March 20 2001 EPS Forecast ANF FYE 1 31 2001A 2002E 2003E 2004E EPS 1 56 1 80 2 15 2 59 Ratios Firm Average of Competitors Forward P E 18 61 18 01 Forward PEG 0 94 1 06 median Forward P B 5 55 4 68 P S 2 67 1 32 Valuation Predictions ANF Actual Price 33 50 P E Valuation 32 41 PEG Valuation 38 01 P S Valuation 16 54 P B Valuation 28 29 EBO Abnormal Earnings Valuation 15 98 DCF Valuation 31 20 Performance ANF Trailing 13wk 26wk 52wk Actual 92 8 29 5 107 1 Relative to S P500 120 9 64 5 177 6 Relative to Competitors 95 0 70 0 91 0 0 80 95 of float 1 60Mil 4 24 49 33 20 00 Specialty Retail Recommend a Market Performer rating on Abercrombie Fitch s stock based on valuation analyses Strong brand equity allows new stores to generate sales quicker than most of its competitors Domestic and potential International expansion will be the driving force in its growth Significant growth potential via new stores under its abercrombie kids and Hollister Co names Increasing productivity by opening smaller stores to increase sales per avg gross square feet Difficult to grow revenues through increase in margins due to them being relatively high 23 23 compared to its competitors avg of 11 9 Same store sales has decreased significantly in the past two years negative growth in FY2001 along with a decrease in sales per average store in FY2001 Rating System BUY A strong purchase recommendation with above average long term growth potential MARKET OUTPERFORM A purchase recommendation that is expected to marginally outperform the return of the market



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