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On Friday, UBS analyst Jay Sole maintained a Neutral rating on Urban Outfitters, Inc. (NASDAQ: URBN) with a steady price target of $60.00. Following the company’s fourth-quarter earnings per share (EPS) beat and a positive outlook for the calendar year 2025, UBS has raised its EPS estimates for Urban Outfitters for the years 2025 to 2027 by 7% to 9%. According to InvestingPro data, the stock currently trades at a P/E ratio of 13.3x, suggesting an attractive valuation relative to its growth potential, with 8 analysts recently revising their earnings estimates upward.
Urban Outfitters reported a stronger than expected performance for the fourth quarter, leading to an optimistic company forecast for the coming years. The company’s robust performance is reflected in its impressive 57.6% price return over the past six months and revenue growth of 7.7% in the last twelve months. Despite these positive developments, UBS believes that the current stock price already reflects the market’s consensus on Urban Outfitters’ earnings potential, which aligns with UBS’s assessment.
The market’s present concerns over potential slowdowns in macroeconomic growth are causing investors to be cautious about pricing in future earnings upside, especially for companies like Urban Outfitters. The specialty retail sector, to which Urban Outfitters belongs, is often viewed as being heavily influenced by macroeconomic fluctuations. InvestingPro analysis reveals the company maintains a strong financial position with a moderate debt level and healthy cash flows, as evidenced by its solid Altman Z-Score of 3.77, suggesting good financial stability. Discover more insights and 12 additional ProTips with an InvestingPro subscription.
UBS’s stance remains unchanged due to the broader economic apprehensions that overshadow the potential for earnings surprises at Urban Outfitters. The firm suggests that should the macroeconomic uncertainties subside and if there are indications of an improvement in Urban Outfitters’ sales growth rate, they might re-evaluate their position on the stock. The company’s current market position and comprehensive analysis are detailed in the Pro Research Report, available exclusively on InvestingPro.
In other recent news, Urban Outfitters Inc (NASDAQ:URBN). announced its earnings for the fourth quarter and fiscal year ending January 31, 2025, revealing record sales growth. The company reported fourth-quarter sales of $1.6 billion, marking a 9% increase year-over-year, with earnings per share (EPS) of $1.04, surpassing the forecast of $0.94. Full-year revenue reached $5.6 billion, an 8% growth from the previous year. Following these results, Citi raised its price target for Urban Outfitters to $65, maintaining a Buy rating, while Telsey Advisory Group increased its target to $59, keeping a Market Perform rating. Analysts noted the company’s strong gross margin improvements and potential for continued growth.
Urban Outfitters’ brands Anthropologie and Free People showed robust performance, contributing significantly to the company’s success. The company plans to open 58 new stores and close 19 in fiscal 2026, aiming for mid-single-digit sales growth. The Nuuly subscription service also demonstrated impressive growth, with a 56% increase in brand revenue for the fourth quarter. Urban Outfitters’ management expressed confidence in achieving further revenue growth and margin expansion in fiscal 2026. These developments indicate a positive outlook for Urban Outfitters as it continues to expand its market presence and improve operational efficiency.
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