Urban Outfitters, Inc. (URBN) Could Go Up In Smoke?

Analysts at Wolfe Research lifted target price for shares of Urban Outfitters, Inc. (NASDAQ:URBN) but repeated their Outperform recommendation for the stock in their opinion released on January 11. The price target has been raised from $49 to $42. Telsey Advisory Group analysts again handed out a Market Perform rating to URBN stock but they lifted target price for the shares in a flash note to investors on January 11. The price target has been raised from $42 to $37. Telsey Advisory Group, analysts launched coverage of URBN stock with a Market Perform rating, according to their flash note to investors on January 11. Analysts at Morgan Stanley issued an upgrade from Equal-Weight to Overweight for the stock, in a research note that dated back to January 09.

How do you judge Wall Street’s opinion of URBN stock? You could look at price, sure. But that doesn’t tell the whole story. Short sellers are getting bullish about Urban Outfitters, Inc. (NASDAQ:URBN) during the most recent two-week period. Looking at the sentiment indicator for the URBN stock we see that the short-interest ratio is at 4.132901 while the average analyst recommendations at 2.6 suggests buying these shares. Between December 14 and December 31, the total number of shorted shares amounted to 8.59 million shares. That was 0.55% less than the total of 8.63 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go up. Average daily volume for Urban Outfitters, Inc. at the December 31st settlement plunged to 2,077,338, as compared to 3,302,580 at the December 14th report. That brought days to cover 58.11% up from the 2.613945 days to cover recorded at the prior short interest data release.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Urban Outfitters, Inc. (NASDAQ:URBN)’s prospects. The earliest insider trade took place on 08/24/2018. Donnelly Trish parted with a total of 19.33 thousand shares of company at average share price of $46.1. The total for the sales was set at $891.21 thousand. After this transaction, the CEO, Urban Outfitters Group account balance stood at 0 thousand shares. The stock lost -29.24 percent since that insider sale. On 07/09/2018, Lawson Joel S Iii, Director, sold 10 thousand shares at a price per share of $45.66. This removed 456.6 thousand shares from the insider’s fortune and the stock saw a -28.56 percent retreat in value since the news became public. This transaction left 7 thousand shares in the Director account. On 07/03/2018, General Counsel and Secretary Hayne Azeez performed a sale transaction worth $359.92 thousand. This sale at $46.28 each has eliminated 7.78 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -29.52 percent decrease since the transaction was reported. The insider now is left with 11.03 thousand shares remaining in the account. Lawson Joel S Iii, who performs the Director job, sold 10 thousand shares for $460 thousand. The disposal occurred on 06/06/2018 was priced at $46 per share. The share price plunged -29.09 percent since the reporting date. Lawson Joel S Iii now left with a stake of 7 thousand URBN stock worth $228.34 thousand after the insider selling.

Urban Outfitters, Inc. (URBN) is expected to jump by 36.82 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $58-month high price target. This represents a whopping 77.81 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $40, which represents a return potential of 22.62 percent when compared to the closing price of the stock of $32.62 on Friday, January 11. The lowest price target for the stock is $35 — slightly more than 7.3 percent from URBN’s current share price.

The shares are currently floating around the first support level of $31.81. Below this, the next support is placed in the zone of $30.99. Till the time, the URBN stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 39.62 on daily chart, which may remain a cause for comfort. If the price breaks below $30.99 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $33.38 mark may result into a pull-back move towards $34.13 level.

URBN shares accumulated 0.06 points or 0.18 percent on Friday to $32.62 with a heavy trade volume of 4.438 million shares. After opening the session at $31.88, the shares went as high as $33.32 and as low as $31.75, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $3.5 billion and now has 107.44 million shares outstanding. Urban Outfitters, Inc. (URBN) stock has lost -7.2 percent of market value in 21 trading days.

URBN stock has a trailing 3-year beta of 0.64, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $2.52 a share in the trailing twelve months. The stock’s value has fallen -1.75 percent year to date (YTD) against a decline of -0.97 percent in 12 month’s time. The company’s shares still trade -37.87 percent away from its 1-year high of $52.50 and 4.55 percent up from 52-week low of $31.20. The average consensus rating on the company is 2.6, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Urban Outfitters, Inc. (URBN) are trading at a P/E ratio of 14.72 times earnings reported for the past 12 months. The industry URBN operates in has an average P/E of 30.76. Its P/E ratio went as low as 12.84X and as high as 22.16 over the 5-year span. Further, it is sporting a 0.9 on the Price-to-Sales ratio. Compare this with the industry average P/S of 2. 33.6 percent is the gross profit margin for Urban Outfitters, Inc. and operating margin sits at 9.2 percent. Along with this, the net profit margin is 5.4 percent.