Urban Outfitters (NASDAQ:URBN) shares rose Tuesday following an upgrade to overweight from equal weight by Morgan Stanley. The firm said the retailer has a de-risked 2023 forecast and low valuation.
In a note to clients on Tuesday the bank’s analysts acknowledged that equity strategists at Morgan Stanley remain underweight consumer discretionary. The strategists sees “outsized room for both negative 2023 EPS revisions & valuation downside” amid macroeconomic uncertainty. However, the analysts on the consumer side argued that this does not mean the overall sector is without spots of opportunity.
Last month, the retailer disclosed sales growth of 5.9% for the quarter to a record tally of $1.11B. Total retail segment net sales rose 5% to top the consensus expectation for a gain of 2.4%. The increase in retail segment comparable sales was driven by high single-digit positive growth in digital channel sales and low single-digit positive growth in retail store sales.
Net income for Urban Outfitters was $52.8 Million vs. $31.5 Million a year ago.
Urban Outfitters, which reached a new 52-week high last week, engages in the retail and wholesale of general consumer products. The company operates through three segments: Retail, Wholesale, and Nully. It operates Urban Outfitters stores, which offer women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics, and beauty products for young adults aged 18 to 28; and Anthropologie stores that provide women’s casual apparel, accessories, intimates, shoes, and home furnishings.
URBN shares acquired $1.10, or 3.4%, to $33.50.