Schaeffer's Trading Floor Blog

Analyst Upgrades: The Home Depot, Inc., Dollar General Corp., and Urban Outfitters, Inc.

Analysts upwardly revised their ratings on HD, DG, and URBN

by 8/19/2014 8:58 AM
Stocks quoted in this article:

Analysts are weighing in today on blue chip The Home Depot, Inc. (NYSE:HD), discount retailer Dollar General Corp. (NYSE:DG), and apparel issue Urban Outfitters, Inc. (NASDAQ:URBN). Here's a quick roundup of today's bullish brokerage notes on HD, DG, and URBN.

  • HD is leading the Dow higher ahead of the bell, with the stock poised to add more than 3% on the heels of a solid earnings showing. The firm also hiked its full-year earnings outlook, and said it plans to buy back $3.5 billion shares by the end of the fiscal year. Against this backdrop, Credit Suisse lifted its price target on The Home Depot, Inc. to $95 from $87, and underscored its "outperform" rating. Most analysts were already optimistic toward HD ahead of earnings, with the stock boasting 13 "buy" or better endorsements, compared to six "holds" and not one "sell." HD settled at $83.59 on Monday.

  • DG gapped 11.6% higher to land at $64.14 on Monday -- its best closing price on record -- after making an all-cash bid for Family Dollar Stores, Inc. (NYSE:FDO). Specifically, DG's per-share offer of $78.50 topped that of rival Dollar Tree, Inc. (NASDAQ:DLTR), which had bid $74.50 per share for FDO. Dollar General Corp. is looking to add to its lead today, with the shares pointed modestly higher on the heels of a price-target boost to $73 from $69 at Deutsche Bank, which also reiterated its "buy" rating on DG. In light of the stock's bull gap, though, its 14-day Relative Strength Index (RSI) now sits at a lofty 76 -- in overbought territory.

  • Finally, URBN -- which finished at $36.92 on Monday -- is pointed 1% higher in pre-market action, after the firm reported stronger-than-expected fiscal second-quarter sales. As such, Baird upgraded URBN to "outperform" from "neutral," while Sterne Agee upped its price target to $38 from $37. (Wedbush, meanwhile, shaved its price target by $1 to $36.) Urban Outfitters, Inc.'s expected advance should put the stock in the black on a year-to-date basis, and could spook a few bears into hitting the exits. Short interest on URBN rocketed 41% higher during the past two reporting periods, and now represents a week's worth of pent-up buying demand, at the equity's average pace of trading.

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