Wedbush Securities Reiterates Neutral, Raises PT On Urban Outfitters As Turnaround Gains Momentum

In a report published Tuesday, Wedbush Securities analyst Morry Brown reiterated a Neutral rating on

, and raised the price target from $40.00 to $44.00. In the report, Wedbush Securities noted, "Continued sales improvement at UO likely to support stock in the near term; strong margin comments set high bar for 2H15 execution. Heading into earnings, we were somewhat cautious around 1Q margin visibility given IMU and mix shift challenges at UO, along with lapping record merchandise margins at Anthropologie. Management noted these headwinds in its commentary on 1Q; however, executives' full year comments struck a confident tone, as the company outlined expectations for margins to increase 100 bps YOY in 2015 (despite a 50 bp headwind from a fulfillment center relocation). We believe this removes much of the risk for margins to disappoint near term, and shares are likely to be supported by improved comp sales trends – which have continued in the mid-single-digit range QTD. That said, the positive commentary does raise the bar significantly on execution during 2H15. We remain NEUTRAL as the after-market reaction appears to factor in much of the expected 2015 margin gains." Urban Outfitters closed on Monday at $39.51.