Bullish indicating open at $55-$60, IPO prices at $37
On Friday, Jefferies analysts upgraded Urban Outfitters, Inc. (NASDAQ: NASDAQ:URBN) from an underperform rating to hold. The decision comes after the company reported a strong first-quarter performance and in anticipation of an upcoming investor event. The retailer, currently valued at $6.26 billion, has demonstrated impressive momentum with a 68.63% return over the past year. According to InvestingPro, 11 analysts have recently revised their earnings estimates upward for the upcoming period.
The analysts raised the price target for Urban Outfitters stock to $70 from the previous $50. The upgrade reflects the analysts’ belief in the company’s potential for improvement, particularly in its Urban Outfitters brand, despite some ongoing challenges in North America. The stock is currently trading near its Fair Value, with a P/E ratio of 14.3x and revenue growth of 8.38% in the last twelve months.
Urban Outfitters’ other brands, including Anthropologie, Free People, Free People Movement, and Nuuly, continue to show robust growth. These brands are expected to contribute to a projected top-line growth of approximately 16% through fiscal year 2027. Want deeper insights? InvestingPro offers exclusive analysis and 12 additional ProTips for URBN, including detailed financial health scores and comprehensive valuation metrics.
Jefferies analysts also noted the potential for Urban Outfitters to achieve an EBIT margin of 10% by fiscal year 2027, up from about 8.6% last year. They see the combination of improved financial metrics and a higher valuation as creating a more balanced risk/reward scenario for the stock.
The analysts’ revised outlook and increased price target come as Urban Outfitters prepares to engage with investors at the event scheduled for next week.
In other recent news, Urban Outfitters has reported its first-quarter earnings, although specific figures were not disclosed in the SEC filing. BofA Securities raised its price target for Urban Outfitters to $80, maintaining a Buy rating, citing the company’s strong financial results, including an earnings per share (EPS) of $1.12, which surpassed estimates. BMO Capital Markets also increased its price target to $76, noting a broad-based beat in first-quarter results and a positive outlook on gross margins. Morgan Stanley (NYSE:MS) lifted its price target to $77, maintaining an Overweight rating, highlighting Urban Outfitters’ robust revenue growth and operating margin expansion. Jefferies, however, raised its price target to $50 while retaining an Underperform rating, pointing out challenges in the North American market despite positive global sales comps. These analyst actions reflect Urban Outfitters’ strong financial performance and potential for growth, with varying levels of optimism about its future prospects.
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