Needham sees 'compelling' opportunities for Urban Outfitters

Urban Outfitters (URBN) is on watch after Needham started off coverage on the retailer with a Buy rating.

Analyst Tom Nikic and his team see compelling opportunities across Urban Outfitter's (URBN) portfolio of retail concepts. "We see strong long-term growth potential at Nuuly and Free People, a major margin/EPS recapture opportunity at the namesake Urban Outfitters brand, and steady growth at Anthropologie (with easier compares ahead)," he noted.

Nikic highlighted that it is a positive that like that URBN's banners aren't "over-stored," with fewer than 300 stores each. Meanwhile, the the cash-rich balance sheet is expected to allow the company to invest in the business while also driving accretion via buybacks. The debt-free balance sheet and low valuation on URBN were also called out.

Needham's 12-month price target of $100 on Urban Outfitters (URBN) is based on a 13X trading multiple to the FY29 EPS estimate.

Shares of Urban Outfitters (URBN) were up 1.3% in premarket trading to $88.49 to carve out a new 52-week high.

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