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Citi maintained its buy rating and $75.00 price target on Urban Outfitters, Inc. (NASDAQ:URBN) following an investor and analyst event in Kansas City last week. The two-day event showcased Urban Outfitters’ Nuuly rental business and e-commerce fulfillment operations. According to InvestingPro data, the stock appears slightly undervalued, with 12 analysts recently revising earnings estimates upward. The company’s strong financial health is reflected in its perfect Piotroski Score of 9, suggesting robust operational efficiency.
The first day of the event took place at the Nuuly fulfillment center, which Citi described as "impressive in many ways" and "like nothing we have seen." Day two featured a visit to the company’s automated e-commerce fulfillment center, which also received positive remarks from the firm.
Citi highlighted the Nuuly rental business as an underappreciated aspect of Urban Outfitters’ operations, suggesting that "the market may not be paying enough attention" to this segment. The firm believes Nuuly will be "an important part of the URBN growth story for many years to come" with significant EBIT margin expansion potential.
The research note emphasized that Nuuly has already established itself as "the leader in the apparel rental market." Citi indicated that Urban Outfitters management "seems to have figured out how to run a very profitable rental business."
Urban Outfitters operates multiple retail brands including its namesake stores, Anthropologie, Free People, Nuuly, and Menus & Venues. The company has been expanding its Nuuly rental service as part of its broader growth strategy in the changing retail landscape.
In other recent news, Urban Outfitters Inc. reported its first-quarter earnings, though specific financial figures were not disclosed in the SEC filing. The company has been receiving attention from analysts, with several firms adjusting their ratings and price targets. Oppenheimer upgraded Urban Outfitters to Outperform, raising the price target to $90, citing the growth potential of the Nuuly rental service. Jefferies also upgraded the stock to Hold, increasing the price target to $70, driven by strong first-quarter performance and expectations for top-line growth. BMO Capital Markets lifted its price target to $76, maintaining a Market Perform rating, and noted a positive inflection in comparable store sales. Morgan Stanley (NYSE:MS) raised its price target to $77, highlighting Urban Outfitters’ trajectory for revenue growth and operating margin expansion. These developments reflect a broad-based positive sentiment among analysts regarding the company’s future prospects.
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