UBS has increased its price target for Abercrombie & Fitch to $173 from $170, but still maintains a Neutral rating on the stock.

The company's recent Q3 report highlighted strong operational execution in a challenging retail environment, with initiatives expected to support sales and earnings per share (EPS) growth over the next few years.

However, UBS predicts a significant slowdown in EPS growth after a remarkable 70% year-over-year increase in FY24. The firm also mentions limited upside to Street estimates due to a deceleration in the Abercrombie brand and ongoing cost pressures, which are likely to hinder meaningful price-to-earnings (P/E) expansion and stock performance in the near future.