Of the 33 analysts covering Lululemon Athletica (LULU) stock, 20 (61%) recommend “buy,” 13 recommend “hold,” and none recommend ”sell.” Their ratings haven’t changed notably since the company announced impressive fiscal 2018 fourth-quarter results. Several analysts increased their 12-month price target for Lululemon stock after the company announced its long-term goals and growth strategy at its Analyst Day on April 24:
- Susquehanna, to $210 from $195
- Credit Suisse, to $195 from $190
- Canaccord Genuity, to $191 from $186
- Telsey Advisory Group, to $200 from $190
- Guggenheim, to $200 from $180
- Wedbush, to $175 from $155
- UBS, to $182 from $176
On May 1, Oppenheimer raised its price estimate for Lululemon stock to $225 from $190, and on May 17, B. Riley increased its price target to $165 from $160. As of June 6, Lululemon stock had risen 40.1% this year, outperforming the S&P 500, which had risen 13.4%. Analysts’ 12-month price target for Lululemon stock was $186 as of June 6, implying a 9% upside.
At its Analyst Day, Lululemon stated that it aims to deliver annual revenue growth in the low teens for the next five years and modest gross margin expansion. It expects its operating income to grow more than its revenue. The company hopes to boost its top line by maintaining its focus on the women’s category and doubling its revenue from the men’s and digital categories. International markets are also a vital growth area for Lululemon—its revenue outside North American grew 10.9% in fiscal 2018, compared with 9.3% in fiscal 2017.
Lululemon is set to declare its fiscal 2019 first-quarter results after markets close on June 12. Analysts expect the company’s adjusted EPS to rise 29.1% to $0.71 in the quarter, and its revenue to grow 16.2% to $755.2 million.