Group 1 - Guess?, Inc. (NYSE:GES) is considered one of the most undervalued retail stocks, with UBS raising its price target to $16.75 from $13, maintaining a Neutral rating [1] - Telsey Advisory also raised the price target for Guess?, Inc. to $16.75 from $13, keeping a Market Perform rating, following the announcement of a go-private agreement valued at $1.4 billion with Authentic Brands [2] - The company is involved in the design, marketing, licensing, and distribution of contemporary apparel and accessories for women, men, and children, with operations divided into segments: Americas Retail, Americas Wholesale, Europe, Asia, and Licensing [3]

Group 1 - Carter's, Inc. reported net sales of $585 million in fiscal Q2 2025, a 4% increase from $564 million in the same period last year [1] - Adjusted EPS for the quarter was $0.01, a significant decline from $0.76 in fiscal Q2 2024 [1] - The company manufactures and sells apparel and related accessories for babies and kids under various brands, including Carter's and OshKoshB'gosh [3] Group 2 - Following the earnings release, Citi analyst Paul Lejuez maintained a Hold rating and reduced the price target from $33 to $28 [2] - Barclays also maintained a Sell rating, cutting the price target from $25 to $22 [2] - UBS analyst Jay Sole reiterated a Hold rating while lowering the price target from $32 to $26 [2]

Group 1 - Abercrombie & Fitch Co. (NYSE:ANF) is considered one of the most undervalued retail stocks, with analysts maintaining a Buy rating and setting price targets of $125.00 and $120.00 from Telsey Advisory and BTIG respectively [1][2] - The analyst consensus rating for Abercrombie & Fitch Co. is a Moderate Buy, with a median price target of $85.76, indicating a potential upside of 39.93% from current levels [2] - Abercrombie & Fitch Co. operates as a global omnichannel retailer, offering a variety of apparel, personal care products, and accessories for women, men, and kids, under its brand portfolio which includes Abercrombie brands and Hollister brands [3]

Group 1 - Victoria's Secret & Co. (NYSE:VSCO) is considered one of the most undervalued retail stocks, with a price target raised from $24 to $29 by Telsey Advisory while maintaining a Market Perform rating [1] - The company showed strong momentum in H1 2025, highlighted by a solid Q2 earnings beat, indicating early signs of progress under new leadership and stabilization under the Path to Potential strategy [2] - Victoria's Secret & Co. operates under multiple brands including Victoria's Secret, Victoria's Secret PINK, and Adore Me, offering a range of products such as sleepwear, loungewear, swimwear, athleisure, lingerie, prestige fragrances, and body care [3]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying those that can fulfill their potential is challenging [1] Group 1: Growth Stock Characteristics - The Zacks Growth Style Score helps identify promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - Urban Outfitters (URBN) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for attracting investor attention, with double-digit growth seen as a strong indicator of future stock price gains [3] - Urban Outfitters has a historical EPS growth rate of 49.2%, with projected EPS growth of 29% this year, significantly outperforming the industry average of 12.1% [4] Group 3: Cash Flow Growth - High cash flow growth is essential for growth-oriented companies, allowing them to fund new projects without relying on external financing [5] - Urban Outfitters currently has a year-over-year cash flow growth of 22%, compared to an industry average of -3.2% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 9.1%, exceeding the industry average of 7.6% [6] Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with near-term stock price movements [7] - Urban Outfitters has seen upward revisions in current-year earnings estimates, with the Zacks Consensus Estimate increasing by 0.9% over the past month [8] Group 5: Conclusion - Urban Outfitters has achieved a Growth Score of A and a Zacks Rank 2, indicating its potential as an outperformer and a solid choice for growth investors [10]

Group 1: Company Performance - Middle Coast Investing's collective portfolio outperformed the S&P 500 in Q3 2025, with a return of 9.6% compared to 7.8% for the S&P 500 [1] - The Core U.S. portfolios returned 10%, while the Russell 2000 returned 12%, the S&P 600 returned 8.7%, and the Nasdaq generated 11.2% during the same period [1] - European Portfolios appreciated by 5.5% in Q3 2025 [1] Group 2: Lululemon Athletica Inc. Analysis - Lululemon Athletica Inc. (NASDAQ:LULU) had a one-month return of 4.69% but lost 35.42% of its value over the last 52 weeks, closing at $175.59 per share on October 3, 2025, with a market capitalization of $20.888 billion [2] - The company has faced challenges including tariffs and competition from brands like Alo and Vuori, which have impacted its performance [3] - International growth for Lululemon is not strong enough to offset domestic challenges, leading to a negative outlook for the company [3] Group 3: Hedge Fund Interest - Lululemon Athletica Inc. is not among the 30 most popular stocks among hedge funds, with 55 hedge fund portfolios holding the stock at the end of Q2 2025, up from 48 in the previous quarter [4] - Despite its potential, certain AI stocks are viewed as offering greater upside potential and less downside risk compared to Lululemon [4]

Core Insights - Urban Outfitters Inc. (URBN) has demonstrated strong momentum entering the third quarter of fiscal 2026, supported by record second-quarter results and brand strength across its portfolio [1][11] - Management is confident in achieving high-single-digit total sales growth for the fiscal third quarter and maintaining solid progress for the remainder of the fiscal year [1] Retail Segment Performance - Comparable sales in the Retail segment are expected to rise in the mid-single-digit range, driven by growth at Anthropologie, Free People, and Urban Outfitters [2] - The Nuuly subscription business is forecasted to deliver mid-double-digit revenue growth, supported by continued subscriber additions [2] - The Wholesale segment is projected to post mid-single-digit revenue gains [2] Profitability and Margins - URBN anticipates that the gross profit margin for the fiscal third quarter will be flat compared to the prior year, with lower initial product margins due to higher tariffs offsetting positive impacts from reduced markdowns and improved occupancy leverage [3] - For fiscal 2026, URBN expects a gross margin improvement of 100 basis points from the prior year, with approximately 50 basis points of that improvement occurring in the second half [5][11] Expenses and Investments - Selling, general and administrative (SG&A) expenses are projected to rise slightly faster than sales, primarily due to increased marketing investments for Nuuly and Anthropologie, as well as a pre-holiday promotional push [4] - SG&A expenses for the year are anticipated to grow in line with sales, driven by marketing and labor costs associated with brand expansion and store openings [6] - Capital expenditure is planned at $270 million, with allocations of 50% for retail store expansion, 25% for technology and logistics, and 25% for office expansion [6] Market Performance and Valuation - URBN shares have gained 32.7% year to date, contrasting with the industry's decline of 9.6% [8] - The company trades at a forward price-to-earnings ratio of 13.14X, slightly below the industry's average of 18.12X, and holds a Value Score of A [9] Earnings Estimates - The Zacks Consensus Estimate for URBN's fiscal 2026 earnings implies year-over-year growth of 29.1%, with an 8.7% uptick projected for fiscal 2027 [12] - Estimates for fiscal 2026 and 2027 have been revised upward by 6 cents and 11 cents, respectively, in the past 30 days [12]

Core Insights - The economy outside of data center-related businesses is showing signs of weakness, prompting calls for a Federal Reserve rate cut [1][2] - Upcoming earnings reports from companies like McCormick, Delta Air Lines, and Constellation Brands are critical for market sentiment [1][2][3] Company Summaries - **Constellation Brands**: The stock has fallen out of favor, particularly among Hispanic consumers due to concerns over immigration policies and job losses [2] - **McCormick**: The spice maker is expected to report quarterly results, with potential resilience in a slower economy as spices are seen as affordable alternatives [3] - **Dell**: Anticipated to highlight its analyst meeting, focusing on AI integration with Nvidia [3] - **PepsiCo**: Facing pressure from an activist investor and challenges from the growing popularity of GLP-1 weight loss drugs [5] - **Delta Air Lines**: Considered a tough stock to own, down approximately 5% year-to-date despite being a top performer in its sector [5] - **Levi Strauss**: Expected to report a reliable quarter, showing resilience despite tariff impacts [5] - **Honeywell**: The spinoff of its materials division is viewed as a bold move, with investor day scheduled for Wednesday [4] Economic Commentary - Federal Reserve President Austan Goolsbee's upcoming speech is significant as he is a voting member of the Federal Open Market Committee, expressing caution about rapid interest rate cuts due to inflation concerns [6]

Core Viewpoint - TCW Relative Value Mid Cap Fund reported a strong performance in Q2 2025, with a return of 7.37%, outperforming the Russell Midcap® Value Index which returned 5.35% [1] Company Overview - Urban Outfitters, Inc. (NASDAQ:URBN) is a lifestyle products and services company with a market capitalization of $6.56 billion as of October 2, 2025 [2] - The company operates 744 stores globally, including 257 Urban Outfitters stores, 241 Anthropologie stores, and 237 Free People stores [3] Investment Highlights - Urban Outfitters, Inc. has shown a one-month return of 2.49% and a remarkable 103.93% increase in share value over the last 52 weeks [2] - The stock initially had a market capitalization of $6.5 billion and met four out of five valuation factors: price-to-earnings, price-to-sales, price-to-book, and price-to-cash flow [3] Growth Catalysts - Key catalysts for Urban Outfitters include a turnaround at the Urban Outfitters brand, new product launches, and growth in adjacent product categories [3] - The company plans to clean up inventory and lower markdown levels in fiscal 2026, followed by enhanced marketing efforts [3] - Anthropologie is focusing on expanding in warm weather, athleisure, and intimates and lounge categories, while also seeing positive sales growth in Home [3] - Free People aims to open 25 new stores in 2025, contributing to overall top-line growth and improved cash flow [3]

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fun ...