FBR Research Upgrades Urban Outfitters (URBN) to Outperform; Sees Positive Comp Trends in 2010
URBN Hot Sheet
Rating Summary:9 Buy, 12 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
FBR Research upgrades Urban Outfitters (Nasdaq: URBN) from Market Perform to Outperform. Price target $35.
FBR analyst says, "We are upgrading URBN based on (1) our belief that the company could return to sustainable positive comp trends in 2010, (2) attractive risk/reward due to the market pullback, and (3) superior business model and management team that deliver top and bottom growth. The company's holiday comp was a +5%, which is the first reported positive comp since 3Q08, with all three divisions comping positively. Channel checks in January suggest similar trends at the three divisions that we saw in the holiday period. We expect that on the back of the improving business, particularly at Anthropologie, we may see inventory levels begin to build into the new fiscal year. Slightly higher inventory would allow for stronger comp performance given some of the missed sales opportunities due to tight inventory control during the holiday season."
"Our 4Q09 EPS estimate is $0.42 versus consensus of $0.40. We are maintaining our FY09 estimate of $1.25, FY10 of $1.54, and FY11 of $1.83. Our PT remains $35, which is 23.0x (based on a 23% three-year earnings growth rate) our FY10 EPS of $1.54, representing 15% potential upside from current levels."
To see all the upgrades/downgrades on shares of URBN, visit our Analyst Ratings page.
FBR analyst says, "We are upgrading URBN based on (1) our belief that the company could return to sustainable positive comp trends in 2010, (2) attractive risk/reward due to the market pullback, and (3) superior business model and management team that deliver top and bottom growth. The company's holiday comp was a +5%, which is the first reported positive comp since 3Q08, with all three divisions comping positively. Channel checks in January suggest similar trends at the three divisions that we saw in the holiday period. We expect that on the back of the improving business, particularly at Anthropologie, we may see inventory levels begin to build into the new fiscal year. Slightly higher inventory would allow for stronger comp performance given some of the missed sales opportunities due to tight inventory control during the holiday season."
"Our 4Q09 EPS estimate is $0.42 versus consensus of $0.40. We are maintaining our FY09 estimate of $1.25, FY10 of $1.54, and FY11 of $1.83. Our PT remains $35, which is 23.0x (based on a 23% three-year earnings growth rate) our FY10 EPS of $1.54, representing 15% potential upside from current levels."
To see all the upgrades/downgrades on shares of URBN, visit our Analyst Ratings page.
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