Brean Murray Carret & Co. Downgrades Urban Outfitters, Inc. (URBN) to Sell; Expect Q4 Comps Weaker-Than-Expected

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URBN Hot Sheet

Rating Summary:
9 Buy, 12 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
Up: 16 | Down: 7 | New: 22

Brean Murray Carret & Co. downgraded Urban Outfitters, Inc. (NASDAQ: URBN) from Hold to Sell, price target cut to $23.00.

Brean analyst says, "We believe it is almost a fait accompli that, with virtually all top management turning over in the past three months, results for at least the first half of 2012 will be choppy, at best; based on what we have seen so far, inventories will be tight, but results very weak. Further, we believe the reinstitution of the 4Q comps release will not be a positive in terms of overall comps and will see management once again reiterate how weak gross margins have been in 4Q, which we believe will institute another round of earnings cuts. Further, with unit growth increasingly the only top and bottom line driver for the company, we believe the premium valuation multiple investors seem to almost compulsively attribute to URBN will narrow."

Brean analyst cuts FY13 EPS to $1.42 (from $1.59) and starts FY14 at $1.65.

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 $27.48 yesterday, with a 52 week range of $21.47-$39.26.

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