UBS Financial upgraded Urban Outfitters (URBN

) to buy from neutral.

Analyst Richard Jaffe says his upgrade is based on better same store sales than he previously expected, and a refreshed outlook on valuation. He says Urban Outfitters is the most visible, compelling growth story in his universe. He thinks the retailer continues to warrant a premium to the market and specialty retail group, with room for appreciation.

Jaffe raised the 98 cents 2003 earnings per share estimate to $1.04, and upped the $1.18 2004 estimate to $1.25. He says the most potent risk at Urban Outfitter is its fashion business. He raised the $25 target to $38 as growth, and a significant rate of return, offsets the risks to the fashion business.