Strong Sales Momentum and Strategic Initiatives Justify Buy Rating for Urban Outfitters

Lorraine Hutchinson, an analyst from Bank of America Securities, reiterated the Buy rating on Urban Outfitters (URBN – Research Report). The associated price target was raised to $70.00.

Lorraine Hutchinson’s rating is based on the strong sales momentum observed across Urban Outfitters’ brands, particularly Anthropologie and Free People, which are among the top-performing apparel brands in the market. The company reported better-than-expected earnings per share for the fourth quarter, driven by strong sales and improved gross margins. The performance of Nuuly, a promising growth opportunity, and the sequential improvement in Urban Outfitters’ sales further support the Buy rating.
Lower markdowns at Urban Outfitters contributed to gross margin outperformance, exceeding guidance expectations. The company’s strategic initiatives, including store openings at Free People and Anthropologie, are expected to drive future growth. Additionally, the turnaround efforts at Urban Outfitters show potential for positive growth in the coming fiscal years, with management anticipating a return to positive comparable sales growth. These factors collectively justify the Buy rating and the increased price objective of $70.

In another report released on February 21, Morgan Stanley also maintained a Buy rating on the stock with a $63.00 price target.