Canaccord Genuity Reiterates $43.00 Price Target for lululemon athletica (LULU)
lululemon athletica (NASDAQ:LULU) has been given a $43.00 price target by equities research analysts at Canaccord Genuity in a research note issued to investors on Tuesday. The firm currently has a “sell” rating on the apparel retailer’s stock. Canaccord Genuity’s price target points to a potential downside of 35.20% from the stock’s previous close.
The analysts wrote, “LULU will report FQ3 results on Wednesday, December 6 AMC. We are modeling a 4% comp and 52c in EPS (vs. consensus comp of 5.3% and EPS of 52c); however, we believe there could be upside of ~200bps to our comp assumption and ~2c-3c to EPS largely driven by continued strength in men’s and improving outerwear sales. That said, we believe buyside expectations are high (and uniformly positive), with comp expectations in the 6-7% range, leaving little room for topping an already elevated bar. As for gross margin, now that much of the company’s supply chain recapture work has been completed, we are looking for only modest GM expansion (+16bps vs. flat guidance), and during the quarter, we noticed persistently elevated levels of inventory on the company’s We Made Too Much page (e.g. over 300 women’s styles on sale during much of October), even despite lululemon having had its third warehouse sale this year, a physical sale in Ontario at the end of September. Separately, a month ago, news of Creative Director Lee Holman’s resignation (for personal reasons”) after just two years in the role should have been cause for concern (his predecessor lasted only two years as well), however, that was overshadowed by the CEO’s commentary that referenced momentum in the business entering the holiday season. Since that announcement, the stock has been up 5% vs. the XRT +12% (700bps of weaker relative performance). Taking it together, while we see the likelihood of a Q3 EPS beat, we continue to see mounting evidence of our denim fashion shift thesis taking shape over the next 4-6 quarters and thus would use any strength as a selling opportunity.””
A number of other research analysts have also recently commented on LULU. B. Riley reiterated a “neutral” rating on shares of lululemon athletica in a report on Wednesday, November 1st. BMO Capital Markets set a $55.00 price objective on lululemon athletica and gave the company a “hold” rating in a report on Tuesday, August 8th. Vetr upgraded lululemon athletica from a “hold” rating to a “buy” rating and set a $63.40 price objective on the stock in a report on Thursday, August 10th. Needham & Company LLC reiterated a “buy” rating and issued a $71.00 price objective (up from $69.00) on shares of lululemon athletica in a report on Friday, December 1st. Finally, BidaskClub lowered lululemon athletica from a “buy” rating to a “hold” rating in a research report on Saturday, August 12th. Five equities research analysts have rated the stock with a sell rating, seventeen have issued a hold rating, nineteen have issued a buy rating and one has issued a strong buy rating to the stock. lululemon athletica currently has a consensus rating of “Hold” and a consensus price target of $65.85.
A number of institutional investors have recently modified their holdings of the business. Vanguard Group Inc. increased its holdings in lululemon athletica by 3.1% in the second quarter. Vanguard Group Inc. now owns 7,850,066 shares of the apparel retailer’s stock valued at $468,413,000 after buying an additional 233,035 shares in the last quarter. BlackRock Inc. increased its stake in shares of lululemon athletica by 4.4% during the 2nd quarter. BlackRock Inc. now owns 5,373,376 shares of the apparel retailer’s stock worth $320,629,000 after purchasing an additional 228,068 shares in the last quarter. HS Management Partners LLC increased its stake in shares of lululemon athletica by 36.4% during the 2nd quarter. HS Management Partners LLC now owns 2,775,486 shares of the apparel retailer’s stock worth $165,613,000 after purchasing an additional 741,200 shares in the last quarter. Janus Henderson Group PLC increased its stake in shares of lululemon athletica by 16,053.2% during the 2nd quarter. Janus Henderson Group PLC now owns 2,614,550 shares of the apparel retailer’s stock worth $156,010,000 after purchasing an additional 2,598,364 shares in the last quarter. Finally, Eaton Vance Management purchased a new position in shares of lululemon athletica during the 2nd quarter worth approximately $126,967,000. 79.45% of the stock is owned by institutional investors.
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About lululemon athletica
lululemon athletica inc. is a designer, distributor and retailer of athletic apparel. The Company operates through two segments: Company-operated stores and Direct to consumer. It is also engaged in the sale from outlets, showrooms, sales from temporary locations, sales to wholesale accounts, warehouse sales, and license and supply arrangements.
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