URBN - Urban Outfitters: Limited Upside Heading Into Q3 Earnings

• Urban Outfitters is set to report its fiscal Q3 2022 earnings later this month, with revenue expected to increase ~13% on a two-year basis.
• These double-digit growth expectations follow what was a blow-out quarter in Q2, with record Q2 results, driven by strong comp sales across all 3 brands.
• However, with Urban Outfitters trading at nearly 12x FY2022 earnings estimates, the reward/risk looks balanced at best, given that this is only slightly below the company's historical price-to-earnings ratio.
• In summary, I believe there are much better value propositions elsewhere in the market, and I would view any rallies above $40.80 before year-end as profit-taking opportunities.

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