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On Thursday, BofA Securities demonstrated confidence in Urban Outfitters, Inc. (NASDAQ:URBN), by raising its price target on the company’s stock to $80 from the previous $70, while reaffirming a Buy rating. The firm’s analysts cited the positive performance of the brand’s divisions as the primary reason for the adjustment. According to InvestingPro data, the stock appears undervalued based on its Fair Value analysis, with four analysts recently revising their earnings expectations upward.
Urban Outfitters’ recent financial results have shown an encouraging trend, with a reported first-quarter earnings per share (EPS) of $1.12, surpassing the estimates of $0.77 and $0.81. This outperformance is attributed to robust sales and gross margin figures of 34.8%. The company’s success was noted across all its banners, including Urban Outfitters with a 2% rise, Anthropologie at 7%, and Free People at 3%, each showing positive comparable store sales. Additionally, Nuuly, the brand’s subscription rental service, reported a significant 60% increase in sales. The company’s strong execution has contributed to an impressive 52.9% stock price return over the past six months. For deeper insights into URBN’s financial health and growth potential, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of key metrics and growth drivers.
The positive financial outcomes have led BofA Securities to revise their forecasts for Urban Outfitters. The firm increased its fiscal year 2026 and 2027 estimates by 9%. The new price objective of $80 is grounded on an 8 times forward-looking enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple for the fiscal year 2027, reflecting the higher estimates. Currently, the stock trades at a P/E ratio of 13.8x and a notably low PEG ratio of 0.35, suggesting attractive valuation relative to its growth prospects.
The analyst from BofA Securities highlighted the strong performance of the Anthropologie and Free People brands, considering them among the top apparel brands in the market. The analyst also pointed to Nuuly as a promising avenue for growth.
Urban Outfitters’ financial health and its brands’ market performance have evidently impressed analysts, leading to a brighter outlook on the company’s value and potential earnings. The raised price target suggests a belief in the company’s continued ability to perform well and expand its profitability in the coming years.
In other recent news, Urban Outfitters Inc. reported strong financial results for the first quarter of fiscal year 2026, exceeding market expectations. The company achieved earnings per share (EPS) of $1.16, surpassing the forecasted $0.83, and generated revenue of $1.33 billion, which was higher than the anticipated $1.29 billion. This performance was driven by an 11% year-over-year increase in total sales, with notable growth in both digital and physical retail channels. Following the earnings announcement, JPMorgan analyst Matthew Boss upgraded Urban Outfitters’ stock rating from Neutral to Overweight, despite lowering the price target from $78.00 to $56.90. The company’s operating margin expanded significantly by 305 basis points year-over-year to 9.6%, outperforming the Street’s expectation of 7.6%. Urban Outfitters also reported a 5% increase in same-store sales, surpassing analysts’ forecasts of 3.4%. Looking ahead, the company anticipates high-single-digit percentage consolidated sales growth for the second quarter of 2025, with expectations for mid-single-digit same-store sales growth. Urban Outfitters’ management remains optimistic about the company’s future performance, projecting an EPS of approximately $1.48 for the next quarter, above the Street’s estimate of $1.40.
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