Urban Outfitters Dressed For Success, Gets Upgrade From JPMorgan

Urban Outfitters, Inc.’s URBN top-line is inflecting above the pre-COVID-19 pandemic levels, while there appear to be additional catalysts for the back half of 2021 and in 2022, according to JPMorgan.

The Urban Outfitters Analyst: Matthew Boss upgraded the rating for Urban Outfitters from Underweight to Neutral, while raising the price target from $30 to $38.

The Urban Outfitters Thesis: While the company’s first-quarter inflection seems to have runway remaining, the stock has underperformed “our Specialty coverage” by 30% year to date, Boss said in the upgrade note.

Management cited acceleration in apparel demand being driven by “the move from cozy/comfort (i.e. “stay-at-home”) to “social casual” with continued strength in the home and athletic/active categories,” the analyst noted. He added that occasion-wear, which caters to weddings and other events, could be “the next leg of improvement” for Urban Outfitters, given 50% of Americans are already fully vaccinated.

Trends like students attending school in person, a return to the office, and increased global travel could also accelerate the company’s performance, Boss said.

URBN Price Action: Shares of Urban Outfitters had risen by 14.34% to $39.98 at the time of publication Wednesday.

(Photo by Chinmay Wyawahare on Unsplash)