Jefferies raises Urban Outfitters price target to $50, retains Underperform

On Thursday, Jefferies analyst Corey Tarlowe adjusted the price target on Urban Outfitters, Inc. (NASDAQ:URBN) stock, increasing it to $50 from the previous $46, while maintaining an Underperform rating on the company. The revision follows Urban Outfitters’ release of its first-quarter results, which displayed strong performance, particularly in turning its Urban Outfitters brand comparable sales (comps) positive. The retailer, currently valued at $5.5 billion, has demonstrated impressive momentum with a 51% return over the past year and revenue growth of 7.7%.

Despite the positive aspects of the quarterly report, Tarlowe noted that Urban Outfitters’ North American comps experienced a decline of 4%, contrasting with a 14% increase in Europe and the rest of the world (ROW) sales comps. The analyst expressed continued concern for the company’s outlook, specifically highlighting the North American market as a persistent challenge. According to InvestingPro, which offers 10+ additional insights, the company maintains strong financial health with a "GREAT" overall score, while trading at an attractive P/E ratio of 13.8x.

Tarlowe’s commentary acknowledged the efforts of Urban Outfitters’ management in achieving positive results but pointed out the risks that still loom over the retailer. The revised price target reflects the company’s guidance for low single-digit percentage growth in same-store sales (SSS) and the strengths observed in other brands under the Urban Outfitters umbrella.

Despite the increase in the price target, the Underperform rating suggests that Jefferies remains cautious about Urban Outfitters’ stock, particularly in the context of its performance in North America. The new price target of $50 represents Jefferies’ updated valuation of the company’s shares in light of recent developments and forward-looking projections.

In other recent news, Urban Outfitters, Inc. reported impressive first-quarter earnings for fiscal year 2026, with an earnings per share (EPS) of $1.16, significantly surpassing analyst forecasts of $0.83. The company’s revenue reached $1.33 billion, exceeding projections of $1.29 billion and marking an 11% year-over-year increase. Additionally, BofA Securities raised its price target for Urban Outfitters to $80, maintaining a Buy rating due to the strong performance across all brand divisions, notably Anthropologie and Free People. JPMorgan also upgraded Urban Outfitters’ stock rating from Neutral to Overweight, although it adjusted the price target to $56.90 from $78.00. The upgrade followed Urban Outfitters’ better-than-expected earnings report, highlighting a 5% increase in same-store sales, which exceeded analysts’ forecasts. Urban Outfitters’ management anticipates further growth, projecting high-single-digit percentage sales growth for the second quarter of 2025, with expectations for improvements in gross margins. Analysts have noted Nuuly, the company’s subscription rental service, as a promising growth avenue, reporting a 60% increase in sales. These developments reflect a positive outlook for Urban Outfitters, supported by strong brand performance and strategic initiatives.

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