Why Urban Outfitters Inc. Stock Popped Today

What happened

Shares of Urban Outfitters Inc. (NASDAQ: URBN) climbed 5.3% on Monday after a notable analyst upgrade.

More specifically, Jefferies analyst Randal Konik maintained his "buy" rating on the lifestyle retail chain but also increased his per-share price target from $34 to $40. Urban Outfitters stock closed today at $34.50 per share.

Stock market prices with red and green arrows indicating direction

IMAGE SOURCE: GETTY IMAGES.

So what

To justify his optimism, Konik noted that his weekend mall checks indicate "ongoing solid traffic trends," which are being helped by cool weather and slightly higher-than-average promotions.

And Urban Outfitters wasn't the only name to climb at Konik's suggestion. Shares of Ambercrombie & Fitch (NYSE: ANF) were also up 6.7%, American Eagle (NYSE: AEO) rose 4.9%, and Boot Barn (NYSE: BOOT) jumped 6.3%.

Now what

But Urban Outfitters, in particular, is up nearly 24% over the past month. That performance started with an impressive third-quarter earnings report that exceeded expectations on both the top and bottom lines. Drilling deeper, Urban Outfitters achieved positive comps (excluding the impact of hurricanes) at each of its three concepts, including a 1% gain at its namesake stores, a 5% increase at Free People, and 2% growth at Anthroplogie.

CEO Richard Hayne credited improved apparel execution across the business at the time, but he also urged caution, given the "highly promotional and unpredictable" retail environment during the key holiday season.

However, the favorable traffic trends to which Konik refers should certainly help -- at least assuming Urban Outfitters can effectively manage costs and stem the negative impact those promotions typically have on margin. So while Urban Outfitters isn't slated to report quarterly results again until early February, it's no surprise to see the stock continuing to rise right now.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.