Urban Outfitters Earnings: Positive Report Despite Namesake Brand’s Struggles; Shares Fairly Valued

We expect to lift our $42.50 fair value estimate for Urban Outfitters by a low-single-digit percentage after first-quarter results outpaced our expectations but rate its shares, up more than 50% over the past year, as fully valued. Despite nice results in a tough market, we classify the firm as no-moat and think there is limited upside from its current yearly operating margins of about 8% due to competitive pressures.