Imagine this… The CEO departure at Urban Outfitters, Inc. (NASDAQ: URBN) may actually be a positive development for the company. Stern Agee’s Margaret Whitfield and Tom Nikic maintained a Neutral rating on Urban Outfitters and have a $28.00 price target objective.
Where this report gets interesting is that the team views the CEO change as a positive development with no seismic strategy change likely. The note even says “We believe the management change could improve the company’s fortunes. We think the firm under founder Dick Hayne will be better run as he has been a strong operator and people focused, whereas outgoing CEO Glen Senk’s expertise was as a merchant. Hayne was involved in most major decisions in his role as Chairman and was involved with all recent executive hires including the new CEO of the Anthropologie brand.”
This also serves as a reminder that Hayne has a 22% ownership stake in Urban Outfitters and that his wife is president of the Free People brand. Also noted is speculation that former brand head Ted Marlow may return to the company. As far as other issues, the research report notes that correcting the fashion and inventory at the core brands is the focus.
Today’s news is far from a research upgrade and admittedly it is very hard to get excited about any “Neutral” rating at all unless that was a replacement of a “Sell” rating. When Urban Outfitters broke the news that Glen Senk was leaving, the stock fell by more than 18% from $29.41 down to $23.93. Now shares are back above $25.00.
JON C. OGG
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