Urban Outfitters, Inc. URBN shares are attractive at current levels, according to Baird, which maintained its Outperform rating on the stock after the company indicated an in-line quarter-to-date comp update.
In a regulatory filing, Urban Outfitters said its third quarter retail comps to-date were "flat," including one less full weekend. Excluding the calendar-shift, the brokerage said the comp trends are near consensus expectations of +1.7 percent and Baird's +1.4 percent. The trend is also more consistent with +1 percent comp in the second quarter.
"UO continues to "perform exceptionally well," accelerating slightly from 2Q17 levels as the brand moves past the headwind from lapping promotional activity over the last few years (strong full-price comp in +M-HSD range)," analyst Mark Altschwager wrote in a note.
Altschwager, who noted that the company's lean inventory is supporting its merchandise margins, maintained his EPS estimates for the quarter at $0.44 versus $0.45 consensus.
The analyst continues to recommend investors to park their money on URBN due to its "select apparel exposure amid a choppy industry environment."
"With signs of stabilizing demand and easier sales/margin comparisons for 2H16, we continue to see attractive risk/reward in shares at current levels (~16-16.5x NTM P/E)," the analyst added.
Altschwager has a price target of $38 on the stock, which recently traded at $36.04.
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