Urban Outfitters fall sharply even after EPS, rev beat; tariff impact in focus

** Shares in Urban Outfitters URBN.O down ~11% on Thursday tracking for biggest one-day pct drop since April 3, with the apparel retailer suggesting bigger than previously expected margin pressure from tariffs even as Q2 EPS and revenue beat the Street

** URBN reported adj EPS of $158 vs Street consensus view of $1.48 according to LSEG, which said that its rev of $1.505 bln compared with Wall Street view of $1.479 bln

** Morningstar analyst David Swartz described URBN as overvalued, with the shares seeing strong gains in last year; URBN still up ~26% YTD even with sell-off. However he wrote in a note that "execution, merchandising, and marketing efforts are allowing it to outperform most other apparel and home retailers in a difficult environment"

** Swartz said it was unclear why the shares fell so much Thursday but noted URBN's estimate, issued in its earnings call, that tariffs would shave 75 basis points off its second-half gross margin vs previous estimate for a 20-basis point impact. Still he pointed to management suggestions it could negotiate lower supplier rates, move production, make some small price increases.

** URBN last traded at $69.66 vs median PT of $79, up from $75.50 a month ago, as per LSEG which shows 13 ratings: 2 'strong buy,' 3 'buy,' 8 'hold'

** Other URBN analysts reacted positively with JPMorgan raising its PT $1 to $89, Telsey Advisory raising PT by $8 to $80, MS upping PT by $2 to $84 and Wells Fargo boosting its PT $5 to $75; Bofa raised its price objective to $93 from $90