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Why Wall Street Raised Price Targets after Lululemon’s Q2 Earnings

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A look at the latest ratings for Lululemon Athletica

Wall Street issued a host of price target revisions after Lululemon Athletica’s (LULU) 2Q17 top- and bottom-line beats and guidance upgrades.

Jefferies raised Lululemon’s price target to $60 from $56 while maintaining the hold rating.

“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. We see oppty ahead, as these initiatives continue to take hold and the int’l growth story materializes, but with the bulk of the margin recovery now in the rear-view mirror,” said Jefferies analyst Randal Konik.

Other brokerage firms that raised their price targets included Cowen and Company (from $67 to $68), Canaccord Genuity (from $41 to $43), Instinet (from $65 to $67) J.P. Morgan (from $69 to $71), and D.A. Davidson (from $59 to $66).

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Average target price

Wall Street has set an average price target of $63.79 on LULU, which reflects an upside of ~3% over the next 12 months. The company has a lower upside than peers Under Armour (UAA), Nike (NKE), and Columbia Sportswear (COLM), whose share prices are projected to jump 22%, 15%, and 9%, respectively, over the next 12 months.

While several analysts revised Lululemon’s price target, none of them changed their ratings on the company so far. 

ETF investors seeking to add exposure to LULU can consider the iShares Morningstar Mid-Cap Growth ETF (JKH), which invests 0.4% of its portfolio in LULU.

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