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Lululemon Gains In Face of Weak Indexes, Bearish Comments from UBS

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Shares of Lululemon (NASDAQ: LULU) are higher 1.6 percent to $48.42 in the face of weak broader indexes and bearish comments from UBS.

Analyst Roxanne Meyer believes selling, general and administrative expenses, as well as product and sourcing issues remain an overhang to the company.

The analyst expects Lululemon to step up investments in “supply chain/quality control, ecommerce, international expansion, design talent, and marketing” from last year's already significant investments.

“Should comps remain muted,” heightened investment could be a “sizable pressure point,” Meyer said.

While Meyer believes Lululemon is “a solid long-term growth story,” near-term risks are keeping her on the sidelines. The analyst believes new management will need time to “gel."

Meyer has a Neutral rating and $46 price target on the stock.

Latest Ratings for LULU

DateFirmActionFromTo
Nov 2014Sterne AgeeDowngradesNeutralUnderperform
Nov 2014FBR CapitalInitiates Coverage onMarket Perform
Oct 2014Brean CapitalInitiates Coverage onBuy

View More Analyst Ratings for LULU
View the Latest Analyst Ratings

Posted-In: Roxanne Meyer UBSAnalyst Color Analyst Ratings

 

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