** 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))
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