On Monday, Jefferies analyst Corey Tarlowe increased the price target for Urban Outfitters, Inc. (NASDAQ: URBN) shares, moving it up to $40.00 from the previous $36.00 while maintaining an Underperform rating on the stock. The revision follows Urban Outfitters' report of a 10% increase in quarter-to-date (QTD) sales across most of its brands.
According to InvestingPro data, the stock has shown strong momentum with a 22% gain over the past six months, though technical indicators suggest it may be overbought. With a market capitalization of $5.1 billion and a P/E ratio of 15.6, the stock is currently trading near its Fair Value.
Despite the overall positive sales trend, the Urban Outfitters (UO) brand itself has experienced a 4% downturn in QTD comparable sales. Tarlowe notes that while the path for the UO brand to return to profitable growth appears challenging, there are early signs of a turnaround.
This includes a reported increase in full-price unit sales during the holiday season. The company maintains a healthy financial position with a current ratio of 1.45, indicating sufficient liquidity to meet short-term obligations.
The analyst's commentary highlights the strength observed in other brands under the Urban Outfitters umbrella, particularly FP Movement, which has been a positive performer. The slight uptick in estimated earnings and the raised price target are reflective of the company's current performance and market position.
Tarlowe's analysis suggests that although the UO brand is facing difficulties, the company's other brands are contributing to a more favorable outlook. Urban Outfitters' ability to maintain full-price sales growth, especially during the competitive holiday season, indicates a potential for recovery despite the noted challenges.
In summary, while Urban Outfitters' leading brand is underperforming, Jefferies sees the company's other brands as strong contributors to its financial health. The firm's adjusted price target and maintained rating reflect both the current sales trends and the anticipated trajectory for Urban Outfitters' brands moving forward.
In other recent news, Urban Outfitters Inc (NASDAQ:URBN). reported record holiday sales, with a 10% increase in total company net sales for the two months ending December 31, 2024. The company's Nuuly segment, a subscription rental service, saw net sales soar 55%, driven by a 53% rise in active subscribers, and over an eleven-month period, total company net sales advanced 7%. Urban Outfitters also reported earnings for the three and nine months ended October 31, 2024, showing a 6% increase in total sales to $1.4 billion and a 24% rise in net income to $103 million.
Analysts from Baird and Telsey Advisory Group have adjusted their price targets for Urban Outfitters, with Baird raising the target to $55.00, while Telsey Advisory Group increased it to $46.00. Both firms maintained a Neutral and Market Perform rating on the stock respectively, while Citi upgraded Urban Outfitters from Neutral to Buy and set a new price target at $59.
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