Wolfe Research initiates coverage on Urban Outfitters, Inc. (NASDAQ: URBN) with a Peerperform rating and a price target of $34.00.

Analyst Adrienne Yih Tennant commented, " Tale of Two Brands. We are torn between URBN’s two core brands: Urban Outfitters (“UO”) is coming off of what we estimate to be low-single digit operating margins, while Anthropologie is coming off of peak margins that we estimate to be just under 20% operating margins. We calculate that mean gross margins for both brands is around 37%-38% and that UO has about 1000 bps of recovery opportunity to mean revert, while Anthropologie has about 400 bps of margin erosion to mean revert."

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Shares of Urban Outfitters, Inc. closed at $32.32 yesterday.