Thanks largely to its latest earnings report, clothing retailer giant Urban Outfitters (NASDAQ:URBN) surged 10% in premarket trading, and even added to those gains going into today's trading. Beats on earnings and revenue, and skyrocketing comparable-store sales numbers, helped drive the company's fantastic report. The word from the financial analyst pool is still calling for caution, but there are some signs that favor is starting to swing toward the bulls in Urban Outfitters' direction.
Behind the Numbers With Urban Outfitters' Earnings Report
Urban Outfitters delivered impressive numbers with its earnings report, including the biggest win of all: net earnings of $0.54 per share. Given that the consensus out of Zacks was calling for $0.16 per share, that's an impressive win. It also delivered a dazzling win over the same time last year, when the company posted a loss of $1.31 per share as stores were required to close thanks to the emergence of Covid-19. Urban Outfitters in general is increasingly known for beating consensus; it's done so, reports note, three out of the last four quarters.
Additionally, revenue also represented a win for Urban Outfitters, as the company posted $927.4 million for the first quarter. The Zacks consensus here expected revenue of $897.8 million, and up 7% from the same time in 2019, ahead of the pandemic. The comparison from a year prior, when the pandemic started, is even more stark: the company brought in $588.48 million in revenue then. This is also the third time in the last four quarters that Urban Outfitters has delivered a win in revenue.
The company's CEO, Richard Hayne, pointed to several causes behind the company's recent gains, including the ever-popular increasing vaccination take-up rates which allow stores to reopen and customers to return therein. Hayne also pointed to several records the company established this quarter, including record earnings per share figures, record sales, and a record low markdown rate.
How Do Financial Analysts Feel About URBN Stock?
As for the financial analyst pool, our latest research reveals that the mood is cautious, but the URBN stock forecast does seem to be swinging more toward bullish than previously seen. The company is currently rated as a consensus “hold”, and the “hold” has been in place for the last two years.
A year ago, the company had seven “buy” ratings and 13 “hold” ratings to its credit. Six months ago, that number slipped slightly bearish as the company posted six “buy” ratings along with 13 “hold.” Today, however, the ratings now stand at six “buy” and 12 “hold.” That's still strongly weighted to “hold”, but there is movement toward the bullish.
URBN stock price targets, meanwhile, hold a comparatively narrow range. The current average is $34.35, with lows of $24 and highs of $49 surrounding the average. Given that the current share price is $39.93 as of this writing, the stock has some downside potential to it.
Recent movement for the company, however, has been largely positive. Just today, five out of six analysts that filed opinion on the company increased their price targets. Oppenheimer was the lone holdout, maintaining its “hold” rating. However, Royal Bank of Canada increased from $34 to $40, and Telsey Advisory Group went from $45 to $47. Robert W. Baird hiked its target from $41 to $45, while Barclays took over the new high target, going from $47 to $49. The biggest hike in the group, however, was posted by JPMorgan Chase & Co., going from $30 to $38 and also hiking its rating from “underweight” to “neutral.” Price target boosts were also seen throughout April, as three different analysts pumped up their price targets by a minimum of $6 per share each.
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