After a steady decline in Abercrombie & Fitch Co. shares for several months, an analyst on Friday upgraded the teen-apparel retailer, saying the stock is unlikely to fall further.

Since the beginning of June, New Albany, Ohio-based Abercrombie's shares have plummeted 63 percent.

Jefferies & Co. analyst Randal Konik said in a note to investors on Friday that while the stock is "one of the worst performing stocks in retail," further decline is not warranted.

"While we expect near-term sales and margin pressure to continue, further meaningful stock downside is hard to justify," Konik wrote. "We expect Abercrombie shares to remain range-bound through year-end."

Konik launched coverage of the company in September with an "Underperform" rating, and said that in the near term, results will remain weak.

"Abercrombie management has been focused on protecting its brands by not promoting (something key competitors are doing today)," Konik wrote.

While that will pressure near-term results, the "nonconformist" approach will eventually benefit the brand portfolio when the economy rebounds, according to Konik.

He upgraded the company to "Hold" from "Underperform."

"The biggest risk to our call is a further material deceleration of same-store sales from current trend ... but we think this is already priced into the stock," Konik wrote.

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