Amazon, Abercrombie: Stocks to Watch

NEW YORK (TheStreet) -- These stocks were in the headlines ahead of Wednesday's trading session:

Amazon(ANF) :

Shares of online retailer Amazon were ticking lower ahead of the open after BMO Capital initiated coverage of the company with a market perform rating and a 12-month price target of $260. The firm said it's awaiting a better entry point on the stock, which closed Tuesday at $219.50, up 30% so far in 2012.

"We believe Amazon is poised to continue showing robust revenue growth for the foreseeable future as it adds product categories, expands into international territories, and builds out new business initiatives," BMO said. "We expect the company to spend heavily in fulfillment centers as well as technology and content to drive this robust growth, compressing operating margins in the short term as a result of these expenditures."

The firm is bullish about the long-term opportunity in Amazon shares.

"After a period of investment, we believe Amazon is well positioned to show sustained margin expansion as the company expands into new business initiatives, gains market share, and continues to exploit existing growth drivers," BMO wrote. "However, we believe the current valuation largely discounts this opportunity."

Abercrombie & Fitch(ANF) :

Shares of Abercrombie & Fitch were gaining ground in Wednesday's pre-market action after The New York Post reported the company is planning to launch a "massive" buyback program.

The stock was up nearly 5% ahead of the open after the report, which cited undisclosed sources as saying the repurchase authorization would be a "material increase" over the casual apparel retailer's current 12.9 million share program.

The article also said that Abercrombie CEO Mike Jefferies is considering pulling back on the company's aggressive expansion efforts in Europe. The stock closed Tuesday at $32.77, down more than 30% so far in 2012.

Apple(AAPL) :

UBS initiated coverage of Apple with a buy rating and a 12-month price target of $740, saying it sees the release of the iPhone 5 as another positive catalyst for the stock, which it views as being reasonably priced.