UBS Resumes Coverage on Urban Outfitters, Inc. (URBN) at Neutral; See Near-term Challenges Given Weak Product, Organizational Realignment

UBS resumes coverage on Urban Outfitters, Inc. (NASDAQ: URBN) with a Neutral. PT $25.00.

UBS analyst says, "While still a long-term growth story, URBN is in the midst of a multi-year investing phase, which has created room for error and additional complexity to the business. We believe it will take time to navigate through product issues and organization/leadership changes. While the bar has been lowered for 2H and compares ease, we see EPS risk as we believe product misses will still be material into at least Q4. Investor focus on top line trends will likely weigh on the stock and keep shares range bound until we see signs of a turnaround."

"Our estimates: Q3 $0.33, ‘11 $1.34. Our $25 price target is based on 14.5x our ‘12 est of $1.71. Our Black Skies analysis derives a downside valuation of $13-15."

For more ratings news on Urban Outfitters, Inc. click here and for the rating history of Urban Outfitters, Inc. click here.

Shares of Urban Outfitters, Inc. closed at $22.87 yesterday.

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