Urban Outfitters Inc. (NASDAQ: UBRN) has recently been pushing single-digit sales, but that all could change, maybe. The company announced at its analyst day that its goal by 2020 was to double revenue within that time. The question to ask is whether that is achievable as sales growth is expected to be only about 8.4% in 2014 and then 10% in 2015.

Sterne Agee notes that “there are opportunities” at the firm’s chains to expand offerings and store sizes, but it there needs to be “greater clarity” on how Urban Outfitters progresses toward its newest sales target.

The company announced its initiatives to drive the business and double sales over the next five years, at the company’s analyst day. The company’s three major brands offer opportunities for category expansion that will support growth through customer experience enhancements. Urban Outfitters has multiple growth drivers over the medium term, but without greater clarity in the progress of the initiatives we are stuck looking into the crystal ball.

Despite the new growth initiatives having been laid out by management, there are still reasons for caution. In the near term, the brand is still struggling, and it could take some time to set everything right. The Anthropologie and Free People brands are performing well, but, looking ahead, they are coming up on tough comparisons and may begin moderating to more sustainable growth rates.

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According to Sterne Agee, Urban articulated its plan as such:

Urban’s Road to Recovery. Acknowledging a bumpy LTM with more transition work ahead, management articulated their turnaround strategy, which is centered on elevated product (with higher AURs), along with compelling styling, imagery, and content. Although raising AURs in a tough demand environment could prove challenging, management noted no price resistance from customers for the elevated product thus far.

Sterne Agee made no change to current estimates and continues to project earnings per share of $1.96 in 2015. For the following fiscal year, it projects $2.30 and for fiscal 2017 it projects $2.60. The 12-month price target is $38. Although the company has multiple growth drivers over the next five years, there is only limited upside at this time even with solid growth in its Anthropologie and Free People brands.

UPDATE: Wells Fargo said that management didn’t spend the day talking about omni-channel but they focused on product. Urban Outfitters was praised for this and Wells Fargo’s valuation range is 447 to $49 for the retailer. Its report said,

“After spending about 5 minutes on omni-channel, rest of the 6-hr meeting was about product, new categories/ideas, creative visuals and how to delight and service the customer better. If a retailer gets all that right, it is sustainable in our view. While others with large store bases have to figure out how to make omnichannel work, we think Urban Outfitters has structural advantage of having a small store base, making omni-channel an offensive weapon rather than a defensive strategy.”

Urban Outfitters has a consensus price target of $42.14 and a 52-week trading range of $32.23 to $40.67. It has a market cap of $5 billion. Having average expectations of less than 10% sales growth will create a bit of a disconnect between the investment community and the company’s goal of doubling sales by 2020. It may not be outside of the company’s ability, but it will not be an easy task to achieve.

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