Oppenheimer upgrades Urban Outfitters stock rating after investor event

On Wednesday, Oppenheimer analysts upgraded Urban Outfitters, Inc. (NASDAQ: URBN) to Outperform from Perform. The upgrade comes after the company’s investor day, which highlighted the growth potential of its Nuuly rental service. The analysts also raised the price target for Urban Outfitters stock to $90 from $75. The upgrade aligns with InvestingPro data showing URBN’s perfect Piotroski Score of 9, indicating excellent financial strength, while 11 analysts have recently revised their earnings estimates upward.

The investor event underscored Urban Outfitters’ strategy for sustainable growth within its core portfolio. Nuuly, a rental service, is emerging as a key growth and profit driver in the rental space, according to Oppenheimer analysts. They believe the market has yet to fully appreciate this aspect of the business. InvestingPro analysis reveals the company operates with moderate debt levels and maintains strong cash flows to cover interest payments, supporting its growth initiatives.

Oppenheimer analysts have been positive on Urban Outfitters’ fundamentals and execution for several quarters. However, they remained cautious due to valuation concerns amid an uncertain macroeconomic environment. The recent investor event alleviated some of these concerns, reinforcing confidence in the company’s growth strategy.

The new price target of $90 is based on a sum-of-the-parts valuation framework. Oppenheimer analysts state that this target reflects a stock valuation in the $90-100 range over the next one to two years, supported by a strong balance sheet.

In other recent news, Urban Outfitters Inc (NASDAQ:URBN). reported its earnings for the first quarter ended April 30, 2025. The earnings release, filed with the Securities and Exchange Commission, contained material non-public information about the company’s financial performance, though specific figures were not disclosed in the filing. This period’s results have prompted several analyst firms to update their outlooks on the company. Jefferies upgraded Urban Outfitters from an underperform rating to hold, with a new price target of $70, citing strong first-quarter performance and potential improvement in the Urban Outfitters brand.

BMO Capital Markets also raised its price target to $76 while maintaining a Market Perform rating, highlighting a broad-based beat in first-quarter results and strong comparable store sales. Morgan Stanley (NYSE:MS) increased its price target to $77, maintaining an Overweight rating, and noted Urban Outfitters’ robust revenue growth and operating margin expansion potential. Jefferies, despite raising its price target to $50, retained an Underperform rating due to challenges in North American sales. Overall, these developments reflect a mix of cautious optimism and confidence in Urban Outfitters’ growth trajectory, influenced by recent financial results and market conditions.

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