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NEW YORK (TheStreet) - Urban Outfitters (URBN)  says it can double sales over the next five years, a proposition that analysts applauded at the specialty retailer's investor day in Philadelphia on Tuesday. Chief Executive Richard Hayne spent much of the day explaining that the owner of the Urban Outfitters brand along with the Free People and Anthropologie shops plans to bolster growth, particularly at its flagship stores which have lost much of their shine in recent years to newer entries such as Uniglo.

Urban Outfitter executives talked about building new stores, testing a larger Anthropologie prototype, expanding product lines into areas such as as beauty and home furnishings. Overarching themes focused on enhancing the customer experience both in stores and online, initiatives that are arguably long overdue.

Shareholders have been waiting for this overhaul for a while. Urban Outfitters stock has gained just 1.8% over the past two years compared to a 22% advance for the S&P 500undefined . On Wednesday, shares were rising 1.2% to $37.76.

Urban Outfitters warned two weeks ago that retail comps, which includes both same-store sales and e-commerce sales, across all its brands had declined and were "low single digit negative." Last week, the retailer has been embroiled in controversy after denying that a $130 Kent State University sweatshirt doused in faux blood was a knock on the 1970 shooting massacre at the college.

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Urban Outfitters stock is up just 1.3% over the past 12 months. Shares rose 1.1% to $37.74 on Wednesday. Here's what analysts said.

Eric Beder, Wunderlich Securities (Buy; $42 PT)

We are reiterating our Buy rating, estimates, and $42 price target after attending Urban Outfitters' (URBN) Investor Day. The overall theme was the company's numerous growth levers, which appeared in everything from category development, square footage enlargement, international expansion, or even product additions. Further, Urban Outfitters laid out a 5-year plan that included prudent yet accelerated augmentation in category and product offerings, allowing each brand to be differentiated, yet completely holistic lifestyle brands. In the nearer term, management acknowledged (again) that the UO segment needed revitalization and refocus on product; they believe they are back on track. We continue to view Urban Outfitters as poised for a 2HFY15 comeback, and we remain buyers of URBN shares.

Urban Outfitters remains an organic growth story. Domestically, it will continue to expand through square footage, which will allow for further expansion of categories and products. And Urban Outfitters will be able to achieve three differentiated holistic lifestyle brands. Finally, management is determined to get the UO segment back on track through refocus on quality product and core customer emphasis. As such, we believe the company is on the right track to return to top and bottom line growth, and we remain buyers of URBN shares.

Although management laid out an intriguing set of growth initiatives for the business, we continue to see reasons for caution. In the near term, the Urban brand is still struggling, and it could take some time to right the ship. Also, the Anthropologie and Free People brands are performing quite well, but are coming up on tough comparisons and may begin moderating to more sustainable growth rates. Looking further out, we believe there is meaningful execution risks surrounding management's five-year plan.

The strategy to raise AURs at Urban may present a challenge (given the very promotional competitive landscape and an increasingly value-conscious shopper), the category expansion strategies at Anthro and Free People result in a de-emphasis of their core competencies (apparel), and the store expansion plans may adversely impact productivity and/or the cost structure of the store base. Management's extensive experience should help navigate these risks, but we'd wait for greater clarity before recommending the shares.

We continue to project FY15-FY17 EPS of $1.96/$2.30/$2.60, with our 12-month PT of $38 based on 16-17x FY16E. Although the company has multiple growth drivers over the next five years, we see limited upside to the shares at this time given the ongoing struggles of the namesake brand (even with solid growth at Anthro and Free People).

Paul Lejuez, Wells Fargo Securities (Outperform; $47-$49 price valuation)

URBN's investor day at its Philly headquarters on 9/23 focused on long-term opportunities at each brand, including expanding categories/services, improving customer experience and growing all channels of distribution. The day showcased creative talents of the organization and while the purpose of the event was to focus on the long term, management noted recent changes made in the Urban Outfitters (UO) division continue to show promise. Overall, we come away with greater confidence in URBN's ability to adapt and grow each of its brands.

URBN has what most specialty retailers lack - three differentiated concepts, a significant opportunity to grow sq ft in the U.S. and internationally, and an Ecom business that grows without dragging on profitability. We believe with signs of life at the UO division, combined with industry leading results at Anthro and Free People, we are close to all three concepts working at the same time, which should highlight how URBN's concepts are structurally better positioned to win over the long term relative to most of its mall-based competition.

Richard Jaffe, Stifel (Buy; $44 PT)

The key theme of today's Urban Outfitters Inc. analyst day was growth. URBN's goal is to double topline sales by 2020 while remaining one of the most profitable companies in the sector. To achieve this, the strategy is simple; however the execution will be complex. We reiterate our buy rating and our target price of $44 (19x our 2015 EPS estimate of $2.34).

TheStreet Ratings team rates URBAN OUTFITTERS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate URBAN OUTFITTERS INC (URBN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • URBN's revenue growth has slightly outpaced the industry average of 0.0%. Since the same quarter one year prior, revenues slightly increased by 7.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • URBAN OUTFITTERS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, URBAN OUTFITTERS INC increased its bottom line by earning $1.89 versus $1.61 in the prior year. This year, the market expects an improvement in earnings ($1.93 versus $1.89).
  • URBN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.88 is somewhat weak and could be cause for future problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, URBAN OUTFITTERS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • 41.62% is the gross profit margin for URBAN OUTFITTERS INC which we consider to be strong. Regardless of URBN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, URBN's net profit margin of 8.32% compares favorably to the industry average.

--Written by Laurie Kulikowski in New York.

Follow @LKulikowski

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.