Citi Lowers Price Target for Urban Outfitters (URBN) to $39.00, Maintains Neutral Rating
Citi has revised its price target for Urban Outfitters, Inc. (NASDAQ: URBN) to $39.00, down from $44.00, while keeping a Neutral rating on the stock. This adjustment came after Urban Outfitters reported second quarter earnings per share (EPS) of $1.24, beating the consensus estimate of $1.00.
The company's strong performance was driven by improved gross margins, which rose by 70 basis points instead of the expected decline of 70 basis points. However, comparable store sales only grew by 2%, missing the analysts' 3% growth projection.
Urban Outfitters' management noted a slowdown in sales across all brands from late July to August, indicating a cautious consumer sentiment. The company also provided a lower-than-expected third quarter guidance due to anticipated weaker gross margins.
Citi's analyst expressed concerns about increased promotions in the second half of the year, potentially impacting profitability. The revised price target and EPS estimates reflect these challenges faced by Urban Outfitters.
In conclusion, Urban Outfitters' stock may face pressure in the near future due to weaker sales and higher promotional activity. Investors should monitor the company's performance closely to make informed decisions about their investments.
Analysis: Citi's revised price target for Urban Outfitters reflects concerns about the company's future performance amid challenging market conditions. Investors should stay informed about the latest developments to protect their investments.