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On Thursday, Telsey Advisory Group adjusted its price target for Urban Outfitters, Inc. (NASDAQ:URBN) shares, increasing the figure to $59 from the previous $56, while the Market Perform rating remained unchanged. The revision follows Urban Outfitters’ reported earnings for the fourth quarter, which surpassed expectations due to improved sales and cost leverage. The company, currently valued at $4.88 billion, has demonstrated strong financial performance with a healthy P/E ratio of 14.9 and revenue growth of 6.9% over the last twelve months.
Urban Outfitters’ holiday sales, announced in mid-January, were better than anticipated, and despite a slight slowdown in January, the company managed to achieve high single-digit (HSD) top-line growth. The first quarter’s outlook suggests that this positive trend is likely to continue. The performance of individual brands within the company varied, with Free People and Anthropologie maintaining their strength. Meanwhile, the Urban Outfitters brand showed sequential improvement with fewer markdowns, contributing to margin expansion. The growth avenues for the company include Free People Movement and Nuuly. According to InvestingPro, four analysts have recently revised their earnings upward for the upcoming period, and the company maintains strong financial health with a favorable overall score.Want deeper insights? InvestingPro offers exclusive access to 13 additional ProTips and comprehensive analysis for URBN, including detailed valuation metrics and growth indicators.
Although the Urban Outfitters brand is still considered a work-in-progress and is lagging behind, company commentary indicates a possibility of achieving positive comparable store sales as the year advances. Given the stock’s strong performance since the third-quarter report released in November, the Market Perform rating has been reaffirmed by Telsey.
The updated price target of $59 is based on a forward-looking earnings per share (EPS) estimate of $5.04 over two years, applying an 11.7 times multiple. This valuation is consistent with the near-term multiple of 11.9 times recently observed. The analyst’s perspective reflects the company’s solid quarterly performance and the potential for continued growth, balanced by the ongoing challenges faced by the Urban Outfitters brand.
In other recent news, Urban Outfitters, Inc. reported record fourth-quarter sales of $1.6 billion, marking a 9% year-over-year increase. The company’s earnings per share (EPS) of $1.04 exceeded analyst projections of $0.94, highlighting strong financial performance. Citi analyst Paul Lejuez raised the price target for Urban Outfitters to $65 from $59, maintaining a Buy rating, and noted the company’s EPS beat was due to a stronger gross margin. Urban Outfitters experienced an 8% full-year revenue growth, reaching $5.6 billion, with significant contributions from its brands, Anthropologie and Free People. The company has plans to open 58 new stores and close 19 in fiscal 2026, aiming for mid-single-digit sales growth. Urban Outfitters’ first-quarter-to-date comparable store sales have been approximately flat, despite challenges from adverse weather, suggesting potential for a positive turnaround. The company is targeting a 50-100 basis point improvement in gross margins for fiscal 2026, reflecting optimism in operational improvements. Urban Outfitters’ Nuuly subscription service also posted impressive growth, with plans to expand further, targeting $500 million in revenue.
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