Topeka Starts lululemon at Buy, $70 Target, Says 'Remains Bright Spot' in Specialty Retail

Topeka Capital's Dorothy Lakner initiated coverage on shares of lululemon athletica (NASDAQ: LULU) with a Buy rating and $70 price target Thursday afternoon.

Lakner noted recent "product problems and management changes this year," but believes lululemon "remains a bright spot of growth in specialty retailing." The analyst believes lululemon targeting an "underserved women's athletic market is a positive, and while competition is increasing, LULU still has a loyal customer base for its stylish, premium-priced product, a strong company culture and is one of few specialty retailers growing at 15%-20%."

With shares of lululemon trading at $58.77 in Thursday's post-market session, the Topeka analyst's new price target implies potential upside of about 19 percent.