Why Wall Street Looks Positive on Lululemon after Recent Results
Recent analyst actions on Lululemon Athletica
The yoga-inspired athletic apparel retailer Lululemon Athletica (LULU) received a positive response from Wall Street in September 2017 as the company reported top- and bottom-line beats during the second quarter and upgraded its guidance.
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“LULU’s 2Q performance was impressive, especially considering the challenging athletic backdrop. We believe that the renewed focus on product innovation, along with enhancements to the e-comm experience, is fueling the top-line acceleration,” said Jefferies analyst Randal Konik in a note.
Konik raised Lululemon’s price target from $56 to $60 on September 1 while maintaining a “hold” rating.
Several other brokerage firms also raised their price targets on LULU after the second-quarter results. These included Cowen and Company (from $67 to $68), Instinet (from $65 to $67) J.P. Morgan (from $69 to $71), Canaccord Genuity (from $41 to $43), and D.A. Davidson (from $59 to $66).
Susquehanna upgrades LULU, Bernstein initiates with “market perform”
Susquehanna analyst Sam Poser upgraded Lululemon from “Neutral” to “Positive” on September 5.
Poser said Lululemon currently possessed all aspects of its PEP (product, engagement, and process) initiative, which are together driving its results.
“A long-awaited confluence of consumer engagement and efficient execution is now underway,” said Poser. “Improved product mix, inventory flow to stores is finally supporting consumer engagement,” he added. Poser raised the price target from $64 to $71 on the company.
On September 12, Bernstein initiated coverage on Lululemon with a market perform rating and $66 price target.
Lululemon, which is covered by 35 Wall Street analysts, has received 47% “buy” recommendations. Bank of America and Needham are among the brokers who suggest buying the stock, which compares to 57% “buy” ratings for Nike (NKE), 42% for Columbia Sportswear (COLM), and 18% for Under Armour (UAA).
47% of the Wall Street, including Wells Fargo and Citigroup, have a “hold” recommendation on Lululemon’s stock. 6% of analysts have a “sell” rating on the company.
ETF investors seeking to add exposure to LULU can consider the PowerShares Russell Midcap Pure Growth Portfolio (PXMG), which invests 1.4% of its portfolio in LULU.
See the next part of this series to learn about recent analyst actions on VF Corporation.