A strong performance during an important retail period and an increase in analysts’ price targets were the driving news Urban Outfitters (NASDAQ: URBN) higher in December. Veteran apparel The retailer saw its share price rise nearly 13% at the end of the month as investors were cheered by the latest headlines surrounding the company.
Urban Outfitters did pretty well during the offseason black friday shopping holiday at the end of November. At least that’s the assessment of researcher BMO, who identified the trader as one of the better performers in the sector during that period.
In a new analysis released in early December, BMO said Urban Outfitters and high-end apparel maker Anthropologie saw strong sales and brisk inventory turnover during the period, according to reports. He also singled out an expert in cosmetics Ulta beauty for similar performance.
Although Black Friday 2024 was generally considered a success, some retailers did not fare as well as the market expected. BMO marked Tapestry and Capri Holdings‘ Michael Kors as worse. It was added that companies such as sportswear suppliers Under Armour and manufacturer of exercise bikes The peloton continued to work through turnaround programs to improve their business.
This was backed up by another updated review of Urban Outfitters stock released in the middle of the month. Baird analyst Mark Altschwager raised his price target on the stock to $55 from $49. Although Altschwager maintained a neutral recommendation on the company, he noted several positive factors in the company’s favor.
According to reports, the expert believes the company’s Free People brand, along with Anthropologie, performed better than expected in the previous quarter, with solid momentum continuing into the early holiday season. While concerned that flagship brand Urban Outfitters could improve its top line, management is making progress in turning things around. He also said the company has a strong balance sheet.
Urban Outfitters has certainly done well of late, but it’s important to note that the company has yet to release details on the most important retail period of them all — the holiday season. We should get a clear picture of that when management releases its fourth-quarter results, which will likely happen in late February. Until then, it might be wise to be cautious about stocks after their recent rally.
