Deutsche Bank Upgrades Lululemon Athletica to ‘Buy’

Lululemon Athletica upgraded by Deutsche Bank

Deutsche Bank upgraded yoga-inspired athletic apparel retailer Lululemon Athletica (LULU) on December 14, 2017. Analyst Paul Trussell raised the company from a “hold” to a “buy” rating, citing “significant opportunities” for the retailer in international markets.

“LULU’s international growth pillar continues to reflect one of the company’s most significant opportunities,” wrote Trussell.

“We think LULU will likely beat 4Q expectations on robust SSS [same store sales] and leverage of expenses,” he added.

Trussell also pointed out Lululemon’s strong 3Q17 results, which included a 40% growth in Europe and a stunning 100% rise in Asia’s sales. LULU reported third-quarter results on December 7, 2017.

The company has had better-than-expected top- and bottom-line numbers in all three quarters of its current fiscal year.

Deutsche Bank Upgrades Lululemon Athletica to ‘Buy’

Trussell also raised LULU’s price target to $89 from $72. That represents a 17% upside from its December 15, 2017, stock price.

Share price movement

Lululemon stock has risen 16.7% so far this year as of December 15, 2017. However, it was in the red almost a month ago. It has risen 16.9% over the last month and more than 12% since its 3Q17 results released on December 7, 2017.

LULU stock is now at its 52-week high. Wall Street doesn’t see any upside for the company going forward. On average, analysts expect LULU stock to fall 1% over the next 12 months.

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