Abercrombie & Fitch Co. (ANF) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Abercrombie & Fitch Co. (ANF)

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Intrinsic Value (DCF)

Current$107.62
Intrinsic$348.53
+224%
$236.22$348.53$561.61
Market implies 1% growth for 5 years
DCF analysis suggests ANF could have 224% upside at 25% growth — verify assumptions match your view.
At $108, the market prices in only 1% growth — below historical 25%, suggesting low expectations.
Range: Bear $236 → Bull $562. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$430$464$502$541
10%$299$323$349$375
12%$228$245$264$284
14%$182$196$211$226

Bull Case

  • Bull case ($562) offers 422% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($236) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$659.34M
Year 2$824.18M
Year 3$1.03B
Year 4$1.29B
Year 5$1.61B
Terminal$23.69B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$527.47MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Frequently Asked Questions

Is ANF stock undervalued or overvalued?
🟢 UNDERVALUED

ANF trades at $107.62 vs. our DCF-derived intrinsic value of $288.14, implying +124% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of ANF's future cash flows. The bear case ($187.82) still suggests upside, providing margin of safety.

What is ANF's intrinsic value?

Using a 5-year DCF model: Base FCF of $527M, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $179M net debt and dividing by 0.05B shares: Bear $187.82 | Base $288.14 | Bull $435.85. Current price $107.62 implies +124% to base case.

How is ANF's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($15.44B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.