Analysts Getting More Bullish on lululemon: Oppenheimer Upgrades, William Blair Sees Strong Growth
Shares of lululemon (NASDAQ: LULU) are trading up under a percent Tuesday afternoon following some bullish comments around the Street.
Anna Andreeva from Oppenheimer upgraded the stock from Perform to Outperform citing levers such as “double-digit square foot growth, double-digit growth online, and margin recovery over time” to fuel profit and sales growth.
Likewise, Sharon Zackfia from William Blair sees strong growth on the horizon as lululemon “yields an array of newness and excitement that has largely been lacking since the March 2013 sheer luon recall.” She feels consumer response “has been positive to lululemon's new product assortment, with some items selling out in a matter of days,” says Zackfia.
Zackfia's optimism takes a contrarian stance against “Street expectations [that] have become much more muted, with consensus expectations for roughly flat comps in the first quarter against a 7% year-ago comparison.”
Similar to Andreeva's call, Zackfia sees new management as a “wild card,” specifically when it comes to lululemon's return policy that was so controversial during the sheer luon incident.
The William Blair analyst maintains an Outperform rating on shares of lululemon.
In summary, both analysts at Oppenheimer and William Blair see investor focus returning to lululemon's aggressive growth approach as the March 2013 sheer luon recall fades into a distant memory.
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