) to buy from neutral.
Analyst Kindra Devaney says the upgrade was largely based on valuation. She notes she's been pretty positive on the company's fundamentals, and says there's been concerns on the impact of winter storms due to the outdoor locations of Urban stores. But she thinks that's a short-term problem. She notes the retailer's strengths lie in its differentiation of content and age group target. Devaney says not a lot of companies target the age group that Urban targets: college-oriented lifestyle merchandise and apparel.
She trimmed her $1.62 fiscal 2004 (Jan.) earnings per share estimate to $1.58 on more conservative sales assumptions. She has a $24 six to 12-month target.