Please ensure Javascript is enabled for purposes of website accessibility

Why Urban Outfitters Inc. Stock Popped Today

By Steve Symington - Dec 18, 2017 at 7:40PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The lifestyle retailer and its peers received some encouraging words from Wall Street.

What happened

Shares of Urban Outfitters Inc. (URBN -3.63%) climbed 5.3% on Monday after a notable analyst upgrade.

More specifically, Jefferies analyst Randal Konik maintained his "buy" rating on the lifestyle retail chain but also increased his per-share price target from $34 to $40. Urban Outfitters stock closed today at $34.50 per share.

Stock market prices with red and green arrows indicating direction


So what

To justify his optimism, Konik noted that his weekend mall checks indicate "ongoing solid traffic trends," which are being helped by cool weather and slightly higher-than-average promotions.

And Urban Outfitters wasn't the only name to climb at Konik's suggestion. Shares of Ambercrombie & Fitch (ANF -1.89%) were also up 6.7%, American Eagle (AEO -3.67%) rose 4.9%, and Boot Barn (BOOT -4.58%) jumped 6.3%.

Now what

But Urban Outfitters, in particular, is up nearly 24% over the past month. That performance started with an impressive third-quarter earnings report that exceeded expectations on both the top and bottom lines. Drilling deeper, Urban Outfitters achieved positive comps (excluding the impact of hurricanes) at each of its three concepts, including a 1% gain at its namesake stores, a 5% increase at Free People, and 2% growth at Anthroplogie.

CEO Richard Hayne credited improved apparel execution across the business at the time, but he also urged caution, given the "highly promotional and unpredictable" retail environment during the key holiday season.

However, the favorable traffic trends to which Konik refers should certainly help -- at least assuming Urban Outfitters can effectively manage costs and stem the negative impact those promotions typically have on margin. So while Urban Outfitters isn't slated to report quarterly results again until early February, it's no surprise to see the stock continuing to rise right now.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Urban Outfitters, Inc. Stock Quote
Urban Outfitters, Inc.
$18.85 (-3.63%) $0.71
American Eagle Outfitters, Inc. Stock Quote
American Eagle Outfitters, Inc.
$11.30 (-3.67%) $0.43
Abercrombie & Fitch Co. Stock Quote
Abercrombie & Fitch Co.
$17.41 (-1.89%) $0.34
Boot Barn Holdings, Inc. Stock Quote
Boot Barn Holdings, Inc.
$69.46 (-4.58%) $-3.33

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.