Urban Outfitters (URBN) - Get Urban Outfitters, Inc. Report is a long-term play, according to analysts at DA Davidson who upgraded the stock to buy from neutral while lifting its price target to $36 from $30.
The stock rose 3.4% to $31.70.
Analyst John Morris said he believes that Wall Street is overly focused on the near-term headwinds facing the apparel retailer, missing the opportunity that is also apparent over the long-term.
"Over the last several years, management has been methodically laying the foundation for a best-in-class brand apparel company that could thrive under the shifting retail paradigm. We believe this is likely to become apparent to investors over the course of the coming year," Morris wrote.
Morris noted that Urban Outfitters has a litany of tailwinds working in its favor, including a strong leadership position across all divisions, the fact that it is in the early phases of improving its margin profile, a growing international footprint, and digital platform improvements, among others.
The firm raised its fiscal year 2019 EPS estimate to $2.57 per share from $2.53 while also raising its 2020 estimate to $2.87 per share from $2.83.
"Meanwhile at the core Urban division, President Trish Donnelly's teams have continually improved the product assortment over the last two years. Chief Creative Officer, Margaret Hayne, has been leveraging the elements that have driven the success of the Free People brand, working with each of the brand leaders to better define the creative point of view, including marketing and visual merchandising. She has also been working to help develop and recruit creative talent," Morris wrote.
How Much Money Will I Need to Retire?
Want to learn about retirement planning from some of the nation's top experts? Join TheStreet's Robert "Mr. Retirement" Powell live in New York on April 6 for our Retirement Strategies Symposium. For a limited time, tickets are available for $99 for this full-day event. Check out the agenda, learn about the speakers and sign up here.