Urban Outfitters (NASDAQ:URBN) might be among the best positioned speciality retailers in the market right now, but one analyst sees a "real bloodbath" on the horizon, and she slashed her price target for the retailer from $23 down to $15 per share.

It's the latest, but most significant, revision by MKM Partners analyst Roxanne Meyer, who has tweaked her fair value of the apparel retailer several times over the last six months. It also brings her valuation in line with those of analysts at J.P. Morgan and Deutsche Bank, who cut their price targets over the last few weeks to $18 and $16, respectively.

Urban Outfitters storefront

Image source: Urban Outfitters.

It's going to get ugly

The owner of Anthropologie, Free People, and the Urban Outfitters brands has undertaken some dramatic measures to confront the COVID-19 pandemic, including furloughing its employees, suspending hiring, eliminating bonuses, going on a rent strike, canceling orders from vendors, and more.

Thefly.com reports Meyer wrote in a note to investors that first-quarter trends for the sector had been "in line to better," but says the carnage will begin in the second quarter and a "real bloodbath" will lead to a gross margin that is significantly worse than previously expected.

Although the consensus estimates of sales and earnings for the quarter suggest improvement, Meyer says that's not what she is assuming with her baseline outlook.

Its operations were already struggling prior to the worst of the coronavirus outbreak and may not be bolstered by retailers reopening their stores. Shares of Urban Outfitters are down 50% from their 52-week high and trade between $15 and $16 per share, suggesting Meyer sees little upside for the retailer.