How Much Upside Does Barclays Predict for Lululemon Athletica?
Barclays on Lululemon Athletica
Lululemon Athletica (LULU) operates in the consumer goods sector. Its main focus is on athletic apparel. Barclays (BCS) recently said that the stock has the potential to provide nearly 54% upside from its current level of $55.37 on June 23, 2017. It set a price target of $85.
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The company faced many operational issues in early 2017. The investment firm believes that these issues will not impact its long-term outlook. It is one of the leading brands in athletic apparel in the United States (SPY) (QQQ) (IWM). Barclays believes that in the long term, it will face tough competition from its competitors.
Barclays wrote, “Our recent work on brand interest gives us confidence that the company remains head and shoulders above the competition (excluding the global athletic brands) and we believe the 8% comp result that LULU achieved against two years of difficult comparisons in 4Q16 further demonstrates that the proliferation of Athleisure brands isn’t impacting its business.”
LULU is currently trading at $56. Its 52-week high is $81.81, and its 52-week low is $47.26. It’s currently trading at a price-to-earnings multiple of 26.57x. On a year-to-date basis, the stock has fallen nearly 16% as of June 27, 2017. In the past one year, the stock has fallen nearly 27%. The company posted strong revenue growth both in 2015 and 2016.
In the next part of this series, we’ll analyze Barclays’ view on Jazz Pharmaceuticals.