Could Amazon Acquire Abercrombie & Fitch?

Citi retail analyst Paul Lejuez recently suggested that Amazon (NASDAQ: AMZN) could acquire Abercrombie & Fitch (NYSE: ANF) to strengthen its private label apparel business. Lejuez claims that A&F's valuation is cheap, and that Amazon would gain two young adult brands along with the company's design and sourcing resources.

This isn't the first time we've heard takeover buzz about A&F. Back in 2017, various reports claimed that American Eagle Outfitters (NYSE: AEO) and Express (NYSE: EXPR) were mulling a takeover of the retailer. Therefore, investors should take Lejuez's latest suggestion about an Amazon takeover with a grain of salt.

Abercrombie & Fitch's enterprise value of $2.4 billion is lower than its projected sales of $3.6 billion this year, and its stock trades at less than 14 times forward earnings. Those valuations are cheap, but its discount is warranted.

Continue reading

Source Fool.com