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

** Brokerage upgrades Urban Outfitters Inc to "overweight" from "under-weight" and American Eagle Outfitters

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 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 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%

Company Prior PT Current PT

Name

Urban $41 $63

Outfitters

American $15 $16

Eagle

Outfitters

Tapestry NA $65

Inc

(Reporting by Rashika Singh in Bengaluru)

((rashika.singh@thomsonreuters.com))