Brean Murray Carret Downgrades Urban Outfitters to Sell

Brean Murray Carret lowers its rating on Urban Outfitters

to Sell from Hold and establishes a price target of $23, down 20 percent from current price, as it believes 4Q comps will not meet expectations. Brean Murray Carret comments, "We are... cutting our FY13 EPS to $1.42 (from $1.59) and rolling out FY14 EPS of $1,65; both our projections are now materially below Street consensus. We believe it is almost a fait accompli that, with virtually all top management turning over in the past three months, results for at least the first half of 2012 will be choppy, at best; based on what we have seen so far, inventories will be tight, but results very weak. Further, we believe the reinstitution of the 4Q comps release will not be a positive in terms of overall comps and will see management once again reiterate how weak gross margins have been in 4Q, which we believe will institute another round of earnings cuts." URBN closed at $27.48 a share on Monday.