Analyst Praises Retailer's 2023 Forecast, Cheap Valuation

The analyst also upped the security's price target

Deputy Editor
Jun 13, 2023 at 8:57 AM
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Morgan Stanley upgraded shares of Urban Outfitters, Inc. (NASDAQ:URBN) to "overweight" from "equal weight" and raised its price target to $41 from $27. The analyst said the retailer is poised for an "inflection point," with a de-risked 2023 forecast and cheap valuation. 

Urban Outfitters stock is 3.8% higher at $33.64 before the bell, set to add to a nearly 36% year-to-date lead. The equity found support from the $30 region after a late-May bull gap on the charts, while the wishy-washy 10-day moving average is now firmly underneath. 

Coming into today, the majority of the brokerage bunch were cautious. Of the 11 in coverage, five said "strong buy," and six said "hold." Meanwhile, the 12-month consensus price target of $32.63 is a slim 0.7% premium to last night's close. Short interest has also fallen 12.7% over the last month, and the shares sold short represent 14.1% of URBN's total available float. 

Options traders have been more bullish than usual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Urban Outfitters stock sports a 10-day call/put volume ratio of 1.12, which stands higher than 84% of readings from the past year. This means options traders have been picking up long calls at a much quicker-than-usual clip. 

 

 

 

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