The stock of Urban Outfitters (URBN) is down 7% on Aug. 28 despite the retailer announcing blowout quarterly financial results and receiving multiple price target increases from Wall Street firms.
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Urban Outfitters, which sells everything from clothing to home goods, reported record sales of $1.50 billion and a 27% profit increase that translated into earnings per share (EPS) of $1.58. Wall Street had expected the company to announce earnings of $1.48 per share on $1.48 billion in revenue. The company’s comparable sales rose 5.6%, beating Wall Street forecasts of 4.9% growth.
Management also delivered bullish forward guidance, saying they expect sales to grow in the high single digits for the current quarter. They also said the company is managing to mitigate the impacts of tariffs by negotiating with suppliers and selectively raising prices on some items. Despite the strong print and guidance, URBN stock is trending lower.
Price Targets Raised
Analysts on Wall Street are chalking the stock’s post-earnings decline up to profit taking after Urban Outfitters’ share price gained more than 40% this year. Those same analysts are raising their price targets for URBN stock after the latest financial results and management’s guidance.
Morgan Stanley (MS) raised its price target on Urban Outfitters’ stock to $84 from $82 while reiterating a Buy-equivalent overweight rating on the shares. Bank of America (BAC) lifted its price target on URBN stock to $93 from $90 while keeping a Buy rating on the shares. And JPMorgan Chase (JPM) raised its price target on the stock to $89 from $88 and maintained an overweight rating.
Is URBN Stock a Buy?
The stock of Urban Outfitters has a consensus Moderate Buy rating among 10 Wall Street analysts. That rating is based on five Buy and five Hold recommendations issued in the last three months. The average URBN price target of $82 implies 11.81% upside from current levels. These ratings are changing after the company’s financial results.
