Ahead of the Bell: Urban Outfitters

NEW YORK -- An analyst continues to believe that Urban Outfitters will be able to turn around its business during the second half of the year, driven by fewer markdowns and better products at its stores.

Adrienne Tennant of Janney Capital Markets said that the retailer has managed its inventory well and has not been overly promotional of late. Urban Outfitters Inc. has the right fashion mix at its namesake stores and believes its Anthropologie stores will be able to capitalize on the fall and holiday seasons.

"We believe the story is setting up nicely and remain optimistic about the turn in the second half of 2012," Tennant wrote in a client note on Monday.

The analyst reaffirmed a "Buy" rating and $42 price target.

Urban Outfitters shares closed at $36.61 on Friday. They have slipped 10 percent from their 52-week high of $40.65 in mid-September. They traded as low as $22.27 last October.