Jefferies Maintains an 'Underperform' on Urban Outfitters (URBN); Tops Q2 Estimates, But Valuation Still Excessive

August 21, 2012 7:18 AM EDT
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Price: $26.26 +0.27%

Rating Summary:
    14 Buy, 30 Hold, 0 Sell

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    Up: 30 | Down: 30 | New: 23
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Jefferies maintains an 'Underperform' on Urban Outfitters, Inc. (NASDAQ: URBN) price target of $24.00 (from $17.00).

Analyst, Randal J. Konik, said, "Mgmt did a good job navigating 2Q with better sales, margins and most importantly, earnings. Shares will be up as a result, but we still expect the company's LT return and margin profile to be subdued and growth rate to slow, making a ~$5B market cap excessive in our view. We'd rather own much cheaper names with better growth potential like Abercrombie & Fitch (NYSE: ANF) and Guess (NYSE: GES)."

Raising FY12 EPS estimate from $1.25 to $1.40.

For an analyst ratings summary and ratings history on Urban Outfitters, Inc. click here. For more ratings news on Urban Outfitters, Inc. click here.

Shares of Urban Outfitters, Inc. closed at $31.28 yesterday.

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