Urban Outfitters reports earnings after the market closes tomorrow
Most of Wall Street has stepped into the earnings confessional by now, but there are still some retail stragglers. One intriguing name to watch is Urban Outfitters, Inc. (NASDAQ:URBN), which reports first-quarter earnings after the market closes tomorrow, May 21. Ahead of the event, options traders are betting bearishly.
URBN has a varied history of post-earnings moves. The stock melted up by 8.2% after its earnings report in late February, and tacked on 18.3% in late November. The shares averaged a post-earnings move, regardless of direction, of 10.8% after the last eight reports. This time around, the options market is pricing in a larger-than-usual post-earnings swing of 14.1%.
The stock was last seen trading at $61.68, consolidating below a May 16 record high of $63.21. The shares are up 12% year-to-date, catapulting off their 320-day moving average from their April lows.
There's contrarian potential everywhere you look. Of the 11 brokerages covering URBN, seven maintain "hold" or worse ratings, while the consensus 12-month price target of $59.42 is a 3.5% discount to its current perch. A stellar post-earnings reaction could prompt a flurry of bull notes.
Short sellers, meanwhile, are piling on, with short interest 42% higher in the two most recent reporting periods. The 8.98 million shares sold short accounts for 14.4% of the equity's total available float, and at its average pace of trading, it would take shorts almost four days to buy back their bearish bets.
Options traders also lean bearish, with URBN's 50-day put/call volume ratio of 2.10 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 97th percentile of its annual range. Echoing this, its Schaeffer's put/call open interest ratio (SOIR) of 1.41 sits in the 87th percentile of readings from the past month.