In a report published by J.P. Morgan, it is lowering its EPS estimates and price target on Urban Outfitters URBN.
J.P. Morgan said that in the near term, it thinks URBN shares will continue to be in the penalty box, as lack of fashion clarity pressures retail comps, the company is making investments (need 4% comps in retail to get SG&A leverage in 1H11), international is now challenging (while the company is growing international faster than ever), tax rate is going up ($0.05 hit to 2011 estimates), and there's sourcing pressure coming in 2H. “Still, with the stock off sharply from recent highs, we reiterate our OW given still some of the best organic sq ft growth profiles in our space and now hopefully lowered bar for the next few quarters. We think investors would revisit the stock around $30, although the next data point (10K filing around April 1st) is likely a negative for the stock (given later Easter this year).”
Urban Outfitters closed yesterday at $31.69.
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Posted In: Analyst ColorPrice TargetAnalyst RatingsApparel RetailConsumer DiscretionaryJ.P. MorganUrban Outfitters
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