In a bullish note on Thursday, SunTrust highlighted their encouragement from Lululemon Athletica Inc. LULU's Q1 earnings report. As a result of multiple positive initiatives beginning to come to fruition, SunTrust raised their price target from $79 to $83.
Analyst Pamela Quintiliano cited healthy inventory levels at 4 percent of sales spread in Q1, along with improving traffic after a tough Q2. Another positive factor leading to Quintiliano 's incremental view is the "extremely favorable comments from Laurent Potdevin on the Winter '16 and Spring '17 product lines."
Looking at a P/E ratio of ~32.8X fiscal year 2017 EPS, SunTrust came to a price target of $83. They're extremely impressed by leadership's recent execution, but believe potential hiccups in their call could come from function and fashion missteps.
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