BUZZ-Apparel retailers face tough profit outlook in 2025, Morgan Stanley says

Morgan Stanley expects challenging profit outlook for apparel retailers in 2025 but says revenue trends will remain consistent

Brokerage upgrades Urban Outfitters Inc URBN.O to "overweight" from "under-weight" and American Eagle Outfitters AEO.N to "equal-weight" from "underweight"; URBN up 6% and AEO up 5%

Brokerage expects improved profitability for URBN, along with positive revisions to earnings-per-share and valuation in 2025, and sees potential stock gains for AEO after significant decline in December

Brokerage expects more-of-the-same demand for softlines — goods that are literally soft, such as clothing and linens

Brokerage cuts rating on Ross Stores ROST.O to "equal-weight" from "overweight"; shares down ~1%

Views ROST as overvalued with limited near-term growth prospects

Brokerage cuts PT on ROST to $140 from $164, lowest among 22 analysts covering the stock, as per LSEG data; new PT is a 6% downside to stock's last close

Brokerage resumes coverage of Tapestry Inc TPR.N with "equal-weight" rating and $65 PT

Brokerage expects TPR's profit improvement to be challenging

In 2024, URBN gained ~54%, ROTH rose ~9%, AEO dropped ~21%

(Reporting by Rashika Singh in Bengaluru)

((rashika.singh@thomsonreuters.com))