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Why Wall Street Remains Neutral on Lululemon

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Sep. 5 2017, Published 12:20 p.m. ET

Broader Wall Street view of LULU

Thirty-five Wall Street analysts cover Lululemon Athletica (LULU). While we discussed recent analyst action in the previous part of this series, we’ll now focus on the company’s overall analyst ratings and compare with peers.

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Ratings and recommendations

Wall Street continues to have a neutral view on Lululemon after its 2Q17 results. The company is rated a 2.5 on a scale of 1 (strong buy) to 5 (strong sell). In comparison, peers Nike (NKE), and Columbia Sportswear (COLM) are rated a 2.3 each while Under Armour (UAA) is rated a 3.0.

The athletic retailer is recommended as a “buy” by 46% of the analysts. Bank of America, Needham, and Stifel Nicolaus are among the brokers who suggest buying the stock, which compares to 58% “buy” ratings for Nike and 42% for Columbia Sportswear.

Including Wells Fargo and Citigroup, 49% of Wall Street analysts recommend holding Lululemon’s stock.

Of the total analysts, 6% have set a “sell” rating on the company. In comparison, 3%, 5%, and 21% of analysts suggest selling Nike, Colombia Sportswear, and Under Armour, respectively.

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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