Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Analysts continue to recommend Lululemon Athletica shares into earnings

Published 03/23/2023, 09:13 AM
Updated 03/23/2023, 09:18 AM
© Reuters.  Analysts continue to recommend Lululemon Athletica (LULU) shares into earnings

© Reuters. Analysts continue to recommend Lululemon Athletica (LULU) shares into earnings

By Senad Karaahmetovic

Lululemon Athletica (NASDAQ:LULU) outperformed peers yesterday on the back of positive comments from Wells Fargo analysts, who believe there is “too much negativity” priced in the shares.

“With sentiment the lowest seen in 5+ years, we identify key indicators we're watching for when LULU reports 4Q EPS. We remain confident in our bullish call on: 1) their ability to drive an on-algo FY (esp with China and reasonable NA assumptions), 2) improving inv-to-sales dynamics (inc improved recent checks) and 3) margin drivers (freight/markdowns) supporting GM expansion,” they wrote in a client a note.

Moreover, the analysts like LULU’s valuation as the stock looks cheap.

Lululemon is due to report earnings next Tuesday after market close.

The stock has received an additional boost after Goldman Sachs analysts reiterated a Buy rating today, citing “innovation-led growth and sequentially improving inventory outlook.”

“Our checks remain constructive for brand heat and traffic, with customers continuing to engage with product and LULU issuing several new innovations in recent weeks which we believe could be a tailwind for brand momentum,” they said in a note.

The GS analysts see an “attractive risk/reward at current levels, and see a constructive path for stock outperformance in coming quarters driven.”

While the GS analysts acknowledge that Lululemon operates in a tough environment, they state that negatives are “now fully appreciated by investors, as the tone of our inbound client conversations has become decidedly more negative over the past few months.”

LULU shares are up 1% in pre-market Thursday and down 5.2% year-to-date (YTD).

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.