Dismal Holiday Sales Tank Urban Outfitters Stock

Several analysts have already slashed their price targets, too

by Lillian Currens

Published on Jan 10, 2020 at 9:31 AM
Updated on Jun 24, 2020 at 10:16 AM

Urban Outfitters, Inc. (NASDAQ:URBN) is among the slew of retailers posting holiday sales this week, and the results are not looking good. The Anthropologie parent posted a 2.9% increase in total company sales, which was lower than last year's 5% pop for the same period, as well as a 9% decrease in net sales for its wholesale segment. The company warned that an increase in promotional activity will put more pressure on its fourth-quarter margin than previously anticipated. The stock is eyeing its lowest close in nearly a month, down 6.5% at $25.89, at last check. 

The brokerage bunch has zeroed in on URBN as a result. Already, at least four analysts have cut their price targets, including J.P. Morgan Securities, which trimmed its estimate to $25 from $27, below URBN's consensus 12-month price target of $27.25. Meanwhile, the majority of the 19 analysts covering the stock call it a "hold."

Short sellers will likely be cheering today's dip. While short interest has dropped 5.4% in the last two reporting periods, the 9.41 million shares sold short represent 15.3% of the stock's available float, or 3.5 days of trading at its average pace. 

All this bearish sentiment isn't surprising, considering Urban Outfitter's behavior on the charts. The stock is down nearly 20% year-over-year, and its recent attempt to close its late-November post-earnings bear gap was captured by familiar pressure at the descending 320-day moving average. What's more, URBN just sliced through recent support at its 30-day moving average, and is eyeing its first close south of here since mid-December. 

 


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