Financial Trading Blog
Stock of the day 06/03/2015 – Urban Outfitters Inc
The owner of Anthropologie, Bhldn, Free People, Terrain and, of course, Urban Outfitters failed to match its 2013 highs last year, but has begun to recover after a tough end to 2014. It opened last year at £38.51, and after a steady first few months fell to around $32 at the end of May. However, a rally that began in June culminated in its 2014 high price of $40.27 following strong second quarter results. Yet things took a turn for the worse after this peak, and by October the company was trading at around $34.69 per share.
This slump was exacerbated in mid-October due to a sales warning ahead of its third quarter figures, leading to a 15% crash down to $29.62, with Urban Outfitters reaching its 2014 low a month later at $28.79. However this warning proved to be overstated, as ‘record’ Q3 sales led to Urban Outfitters recover much of its losses and open 2015 at $35.11. By the end of February it had reached $39.74, just a smidgen off of its 2014 highs, following the news that sales were very strong over the holding period. The stock is now trading just lower than this 2015 high at $38.75.
Despite the trend of closing stores, Urban Outfitters remain committed to expansion, as it attempts to build on its 179 US stores, a relative drop in the ocean compared to some of its competitors. The costs of this proposed expansion may make an appearance come the earnings release on Monday.
The aforementioned sales news in February not only saw the company regain ground lost since September, but suggested that Urban Outfitter’s Q4 results are likely to be positive. The company reported that full year sales rose 8% to $3.32 billion, with 12% year-on-year growth for the final quarter. Analysts remain mixed on the stock, however, giving Urban Outfitters a consensus rating of ‘hold’ with a 12 month target price of $37.68.
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