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Wall Street Sees More Upside in Lululemon after Strong Q1 Results

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Jun. 14 2019, Updated 3:59 p.m. ET

Analysts raised price targets after Q1 results

Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. Lululemon announced its results for fiscal 2019’s first quarter (which ended on May 5) after the financial markets closed on June 12. The company’s first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million.

Lululemon’s strong results led to many analysts raising their price targets for the athletic apparel company:

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  • Credit Suisse $198 from $195
  • JP Morgan $200 from $197
  • Morgan Stanley $163 from $160
  • RBC $200 from $190
  • Canaccord Genuity $194 from $191
  • Jefferies $175 from $156
  • MKM Partners $215 from $189
  • Cowen and Company $200 from $192
  • Telsey Advisory Group $205 from $200
  • DA Davidson $180 from $155
  • Wells Fargo $210 from $200

As of June 13, the average price target for Lululemon stock was $191.81. This price estimate reflects an upside of about 10% compared to the closing price on June 13. As of June 13, Lululemon stock had risen by an impressive 43.5% on a year-to-date basis. In comparison, Nike (NKE), Under Armour (UAA), and Columbia Sportswear (COLM) were up 12.8%, 50.5%, and 15.5%, respectively.

Upgraded earnings outlook

Lululemon raised its fiscal 2019 EPS outlook to the range of $4.51–$4.58, compared to the previously issued forecast of $4.48–$4.55. The new EPS guidance is based on revenue growth in the range of 13.4%–14.7%. The EPS guidance also takes into account a $0.04–$0.05 negative impact associated with tariffs and additional airfreight costs.

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