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Hey Fools!
I've been studying Abercrombie & Fitch (ANF) for a
couple of days now and I wanted to discuss valuation
for a moment with whoever is interested. The stock
currently is 94 1/4. I'm trying to put a Jan 2000
price target on this stock to see if it would be a
good investment.
Using the YPEG method (with a forecasted long-term
growth rate of 28.8% and EPS estimate of 2.60) it
comes to about $75.
However, if I use forecasted P/E (55x earnings)
for Jan '00 times the estimate (2.60) I get $143.
Using the forward P/E seems more accurate because a
stock price really is just that: EPS x P/E.
We're talking about a difference of $68 in my two
forecasts for this stock in Jan '00. Does anyone have
any thoughts on which method is more accurate?



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