CFRA Upgrades Urban Outfitters, Inc. (URBN) to Buy

CFRA analyst Zachary Warring upgraded Urban Outfitters, Inc. (NASDAQ: URBN) from Hold to Buy with a price target of $54.00 (from $36.00).

The analyst comments "We raise our 12-month target by $18 to $54, based on 15.0x our FY 25 (Jan.) EPS estimate and above the company's five-year average forward P/E multiple of 12.3x, reflecting our view of the strength of the company's Anthropologie and Free People brands. We raise our FY 25 and FY 26 EPS estimates by $0.60 to $3.60 and by $0.65 to $3.75, respectively. URBN posted normalized Q1 EPS of $0.69 vs. $0.56, $0.16 above consensus estimates on revenues of $1.20B vs. $1.11B and $22M above estimates. By brand in Q1, Anthropologie revenues increased 11% Y/Y; Free People increased 16%; Urban Outfitters declined 12%; and Nuuly, the company's subscription clothing rental segment, increased 51%. Q1 adjusted gross margin expanded 106 bps Y/Y to 34.4% due to higher merchandise markups at Free People and Anthropologie, partially offset by markdowns at Urban Outfitters. URBN continues to maintain a debt-free balance sheet and is managing inventory well. We raise our opinion to Buy and believe the company deserves a higher multiple."

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 $41.32 yesterday.

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