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(Recasts; adds details from Credit Suisse note, updates share movement) Nov 9 (Reuters) - Goldman Sachs and Credit Suisse raised teen apparel retailer Abercrombie & Fitch to their top ratings, citing the strong earnings potential of the company's international business. Shares of Abercrombie, which runs its namesake stores and the Hollister and Gilly Hicks chains, were trading up 7 percent at $37.50 Monday morning on the New York Stock Exchange. They touched a high of $37.77 earlier. Goldman Sachs raised Abercrombie stock to "buy" from "neutral," saying the retailer's international store openings have the potential to almost double its earnings in 2010 as these stores are more profitable and productive. Goldman analyst Michelle Tan added there was ample room for more international openings in 2011 and beyond. Tan also said near-term drivers for improving sales trends at the company's existing stores include a more vocal value message and a tourism rebound in the United States. "Given ANF's depressed margins and accelerating international growth, coupled with our expectation for improving near-term trends, we believe shares should command a multiple premium to more mature peers," said Tan, who raised her price target on the stock by $9 to $45. Credit Suisse raised the stock to "outperform" from "neutral," saying the company may surpass earnings expectations over the back half of the year and fiscal 2010. "The increasing spread between total sales growth and comps indicates international Hollister locations and the SoHo and Milan flagships are driving even higher revenues," Credit Suisse analysts led by P. Lejuez wrote in a note to clients. (Reporting by Vidya Lakshmi and Mihir Dalal in Bangalore; Editing by Pradeep Kurup, Anne Pallivathuckal) Keywords: ABERCROMBIE/RESEARCH GOLDMANSACHS (vidya.lakshmi@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: vidya.lakshmi.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.
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