In a report released yesterday, Jay Sole from UBS maintained a Hold rating on Urban Outfitters, with a price target of $70.00.
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Jay Sole has given his Hold rating due to a combination of factors related to Urban Outfitters’ recent performance and market conditions. The company’s third-quarter sales trends were solid, but there was a noticeable slowdown in the growth rate compared to the previous quarter. Additionally, Urban Outfitters increased its promotional activities, which may have contributed to the stock’s decline by approximately 12% since the second-quarter report, contrasting with the S&P 500’s upward movement.
Jay Sole also notes that while there is potential for a slight earnings per share beat in the third quarter, there are concerns about the company’s guidance for the fourth quarter, particularly regarding sales growth and gross margin pressure. The market sentiment around Urban Outfitters is mixed, with a crowding score above its historical average and a short interest that, although decreased, remains higher than both its historical and industry averages. Furthermore, the company’s valuation, adjusted to reflect increased risk due to tariff cost uncertainties, aligns with its peers, supporting the Hold rating.
Sole covers the Consumer Cyclical sector, focusing on stocks such as On Holding AG, Deckers Outdoor, and Ralph Lauren. According to TipRanks, Sole has an average return of 4.5% and a 49.29% success rate on recommended stocks.
In another report released on November 14, Jefferies also maintained a Hold rating on the stock with a $70.00 price target.