Maxim Group maintains a Hold rating on Urban Outfitters, Inc. (NASDAQ: URBN), with a price target of $32.00, leading up to the release of URBN's Q1 results. The results are scheduled to be released after the close of market on May 18th. however, the shares appear to be pricing for an upside to numbers, which Maxim Group is not expecting.

Maxim Group analyst, Rick Snyder, commented on the URBN pricing, saying, "At times, it becomes necessary to reverse-engineer a valuation metric to see what the market is assuming. In the case of Urban Outfitters, it appears that the market is assuming a return to mid-teen operating margin by 2015. This margin would yield an EV/EBITDA multiple of 5.0x to 6.0x on that year's results. Given the uncertain outlook for the specialty retail segment, in addition to the likelihood of higher interest rates by 2018, we believe that these multiples are realistic. Further, our expectation is that continued pressure on gross margins across retail, resulting from continued promotions, makes a return to mid-teen margins less likely."

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Shares of Urban Outfitters, Inc. closed at $40.14 yesterday.