lululemon athletica (LULU) Given a $43.00 Price Target at Canaccord Genuity
“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.”,” the firm’s analyst wrote.
Several other equities analysts have also commented on the company. Needham & Company LLC reaffirmed a buy rating and issued a $71.00 price target (up previously from $69.00) on shares of lululemon athletica in a research note on Friday, December 1st. Zacks Investment Research lowered lululemon athletica from a hold rating to a sell rating in a research note on Tuesday, November 28th. Bank of America upped their price target on lululemon athletica from $70.00 to $75.00 and gave the company a strong sell rating in a research note on Monday, November 27th. B. Riley reaffirmed a neutral rating on shares of lululemon athletica in a research note on Wednesday, November 1st. Finally, Cowen reaffirmed a buy rating and issued a $68.00 price target on shares of lululemon athletica in a research note on Friday, November 3rd. 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 assigned a strong buy rating to the company’s stock. lululemon athletica currently has an average rating of Hold and a consensus price target of $65.85.
A number of hedge funds have recently bought and sold shares of LULU. IHT Wealth Management LLC raised its position in lululemon athletica by 591.0% in the 2nd quarter. IHT Wealth Management LLC now owns 1,382 shares of the apparel retailer’s stock valued at $105,000 after purchasing an additional 1,182 shares in the last quarter. Zions Bancorporation raised its position in lululemon athletica by 183.2% in the 3rd quarter. Zions Bancorporation now owns 2,096 shares of the apparel retailer’s stock valued at $130,000 after purchasing an additional 1,356 shares in the last quarter. Global X Management Co. LLC raised its position in lululemon athletica by 39.7% in the 2nd quarter. Global X Management Co. LLC now owns 2,532 shares of the apparel retailer’s stock valued at $151,000 after purchasing an additional 719 shares in the last quarter. Thompson Siegel & Walmsley LLC acquired a new stake in lululemon athletica in the 3rd quarter valued at about $156,000. Finally, Oakbrook Investments LLC acquired a new stake in lululemon athletica in the 3rd quarter valued at about $202,000. 79.45% of the stock is currently owned by institutional investors.
lululemon athletica Company Profile
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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