2 Urban Outfitters Analysts Raise Forecasts After 'Broad-Based Beat'

Shares of Urban Outfitters, Inc. URBN rose in early trading on Wednesday, after the company reported record second-quarter sales.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

• BMO Capital Markets analyst Daniel Stroller maintained a Market Perform rating, while raising the price target from $31 to $35.
• Telsey Advisory Group analyst Dana Telsey reiterated an Outperform rating, while lifting the price target from $41 to $42.
• Morgan Stanley analyst Alex Straton reaffirmed an Overweight rating, while raising the price target from $41 to $42.

Check out other analyst stock ratings.

BMO Capital Markets: Urban Outfitters reported a strong earnings beat, driven by both top-line and gross margin upside, Stroller said in a note. “While the UO banner continues to underperform, encouragingly, Men's/Women's Apparel has started 3Q positive."

“With macro pressures remaining, we remain sidelined, but commend management on the profitability improvement and continuing to control the controllables,” the analyst further wrote.

Telsey Advisory: “The earnings beat was driven by broad-based outperformance for the second consecutive quarter,” Telsey wrote in a note. The company’s total sales grew to a record of $1.272 billion for the second quarter, beating the consensus estimate of $1.249 billion, she added.

“Within the topline, total comps grew 4.9%, as compared to the consensus of up 4.7%, driven by strength at Anthro and Free People while UO again underperformed,” the analyst further mentioned.

Morgan Stanley: Urban Outfitters generated record second-quarter results, although UO continued to underperform, Straton said. “Given room for further UO inflection, likely positive EPS revisions, & cheap valuation, we still see stock upside from here,” he added.

Although management’s guidance reflects “better-than-expected topline & GM vs. the Street,” there seems to be “room for upside even to this higher forecast,” the analyst further wrote.

URBN Price Action: Shares of Urban Outfitters had risen by 3.08% to $35.14 at the time of publication Wednesday.

Photo: Mike Mozart from Flickr.