NEW YORK (TheStreet) -- Urban Outfitters (URBN) shares are down -2.2% to $32.98 in pre-market trading on Tuesday after analysts at Wedbush downgraded the retailer to "neutral" from "outperform," while slashing its price target to $37 from $46.
The firm cited increased advertising spending and higher clearance inventory as a reason for the downgraded outlook.
"Our recent store checks indicate a modest increase in promotional activity versus last year during June, along with a slight uptick in clearance inventory. While sales trends at Anthro likely remain near the top of the sector, incremental promotions - even if minor - suggest the potential for a modest slowdown in the recent same store sales trend," said the firm.
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TheStreet Ratings team rates URBAN OUTFITTERS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate URBAN OUTFITTERS INC (URBN) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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 and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."