Urban Outfitters jumps as Goldman upgrades stock, citing Nuuly and brand recovery

Goldman Sachs upgraded Urban Outfitters (URBN) from Neutral to Buy on Monday.

The investment bank raised its 12-month price target for the retailer to $93 from $76. Urban Outfitters shares climbed 6% in pre-market trading following the report.

Analysts pointed to a recovery in the core Urban Outfitters brand's sales and profitability. The bank also highlighted scaling growth drivers, specifically the Free People Movement activewear brand and the Nuuly clothing rental service.

Goldman noted that execution challenges at Anthropologie are now largely reflected in the share price. Management's efforts to reset the Anthropologie product assortment are expected to create a more favorable risk/reward profile.