Lululemon’s biggest bull sees 42% gain

 

Bloomberg

Wall Street analysts are boosting price targets for Lululemon Athletica Inc before the company reports earnings on Thursday, predicting that brand loyalty for the maker of pricey yoga and exercise apparel will help the stock build on a two-month rally that’s erased most of its 2022 losses.
At Cowen, John Kernan lifted his call on Lululemon to $542 per share from $535, further separating himself from all other analysts covering the stock. His projection would mean a 42% increase over the next 12 months from Monday’s closing price of $381.13.
Analysts are betting that Lululemon will extend its eight-quarter streak of double-digit sales growth, even as consumers cut back on apparel spending with soaring inflation hitting their pocketbooks.
On average, the Street
predicts a 25% year-over-year jump in third-quarter net sales, according to Bloomberg consensus, as Lululemon’s products remain in high
demand.
Kernan expects further sales momentum to be buoyed by expanded offerings in categories like running and hiking, according to a research note. He pointed to a Cowen survey showing a “high degree of
loyalty” from Lululemon’s “healthy, high-end” customer base.
The analyst rates the stock outperform and sees potential for management to boost its fiscal 2023 revenue forecast for the third time since June.
The growing enthusiasm comes as the stock has climbed 36% since September 30.

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