Deutsche Bank Reiterates Hold Rating, $65 PT on Lululemon Athletica on Valuation, Management Transitions
In a report published Wednesday, Deutsche Bank analyst Dave Weiner reiterated a Hold rating and $65.00 price target on Lululemon Athletica (NASDAQ: LULU).
In the report, Deutsche Bank noted, “As discussed in our recent sector initiation (‘Despite market angst, we're positive on global apparel & footwear brands', 6/24) our HOLD balances positive themes which suggest that lulu may develop in to a global lifestyle brand over time, with concerns about key mgmt. transitions and valuation. While lulu has many opportunities including cat. extensions & a push in to Men's, for now we're focused on (1) forthcoming CEO & ‘Chief Merchant' hires and (2) the 5Y strategic roadmap. That said, we're cautious on a P/E of 35x F14 plan (32x ex Luon charge). $65 PT based on a LT EPS CAGR of 20%-25% & a 130% PE/G, in-line w/3Y avg.. Upside: comp >7%, downside: P/E feels lofty.”
Lululemon Athletica closed on Tuesday at $70.07.
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