Market Overview

UPDATE: FBR Capital Markets Initiates Coverage on Urban Outfitters on Healthy Margins, Strong Growth

Related URBN
Price Targets On The Rise After Urban Outfitters' Q3 Beat
40 Stocks Moving In Tuesday's Mid-Day Session
Urban Outfitters higher after Q4 update (Seeking Alpha)

In a report published Wednesday, FBR Capital Markets analyst Susan Anderson initiated coverage on Urban Outfitters (NASDAQ: URBN) with an Outperform rating and $43.00 price target.

In the report, FBR Capital Markets noted, “We are initiating coverage of Urban Outfitters, Inc. (URBN) with an Outperform rating and a 12-month price target of $43 per share. Although URBN's business is only semi-exposed to the teen segment through its Urban Outfitters (UO) operations, it has not been immune to recent retail pressures. URBN noted in its 10-Q filed on September 9, 2013, that SSS were in the +MSD for 3Q13 to date, versus the consensus at +MSD/+HSD. Since then, the stock has pulled back 15%. Although we expect continued weakness in the UO segment in 3Q13 and 4Q13, we believe the pullback in the shares provides an attractive entry point for a high-quality name. We think URBN is well positioned to navigate an environment in which consumers crave fashion and differentiated products. URBN's EBIT margin was 13% in 2012, one of the highest in specialty retail, and we believe the EBIT margin can expand back toward its peak of 18%. URBN sits on the horizon of The Anderson Frontier with its strong omni-channel/supply chain capabilities and growth through Free People and the international segment. While there may be some near-term pressure as URBN cycles through tough comparisons in 2H13 and weakness at UO, URBN has a unique combination of growth and margin potential, and we would be buyers on weakness. Our 2014 EPS estimate of $2.30 is 16x the current price, which is below expected EPS growth of almost 20%, and if there is upside to EPS, then URBN is significantly undervalued, in our view.”

Urban Outfitters closed on Tuesday at $36.51.

Latest Ratings for URBN

Nov 2017BMO CapitalMaintainsMarket PerformMarket Perform
Nov 2017JP MorganUpgradesNeutralOverweight
Nov 2017KeyBancMaintainsOverweight

View More Analyst Ratings for URBN
View the Latest Analyst Ratings

Posted-In: FBR Capital Markets Susan AndersonAnalyst Color Initiation Analyst Ratings


Related Articles (URBN)

View Comments and Join the Discussion!

Partner Center