Morgan Stanley has downgraded Urban
Outfitters, Inc. (NASDAQ: URBN) to Equal Weight
from Overweight as risk/reward appears more balanced following 72 percent rally year-to-date.
“Key pieces of the URBN story look largely intact — UO comp momentum, GM recapture, inventory discipline, and tight expense
control — but appear priced in at current levels,” analyst Kimberly Greenberger wrote in a note.
That said, the analyst noted that Urban
Outfitters is navigating retail industry headwinds of apparel price deflation, online competition and margin pressures by
expanding in to shoes, home and beauty. The company also increased its proprietary apparel penetration, and larger format
stores/new
concepts.
However, Greenberger expects 5 percent 2016–2019 sales CAGR, less than half the growth Urban Outfitters saw in 2011–2014, with
EPS growing 9 percent versus 13 percent in 2011–2014.
The analyst has a price target of $39 (up from $36), with a bull case target of $50 and bear case scenario of $22.
Urban Outfitters will release its third quarter numbers on November 22. Greenberger projects EPS of $0.41 versus Street’s $0.44.
The analyst models -0.1 percent comp (vs. Street +1.8 percent), and 3.7 percent total sales growth versus Street’s 5.3 percent.
At last check, shares of Urban Outfitters were down 0.89 percent to $38.77.
Latest Ratings for URBN
Date |
Firm |
Action |
From |
To |
Nov 2016 |
Morgan Stanley |
Downgrades |
Overweight |
Equal-Weight |
Nov 2016 |
Citigroup |
Upgrades |
Neutral |
Buy |
Nov 2016 |
Wunderlich |
Upgrades |
Hold |
Buy |
View More Analyst Ratings for
URBN
View the Latest Analyst Ratings
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