Citi downgrades Urban Outfitters to Neutral ahead of Q2 report

Citi downgraded Urban Outfitters to Neutral from Buy with a price target of $40, up from $36. The analyst anticipates a Q2 earnings beat when the company reports on August 22, but believes market expectations are high into the print. As such, the firm views the stock’s risk/reward are more balanced at current levels. The Urban Outfitters brand will be slower to turn around given fashion inconsistency and a tougher competitive landscape, ultimately limiting possible upside to earnings beyond what is already anticipated by the market, the analyst tells investors in a research note.