Market Overview

10 Things To Like About Lululemon

10 Things To Like About Lululemon

For traders looking for a good reason to buy Lululemon Athletica inc. (NASDAQ: LULU), Citi analyst Paul Lejuez just came up with 10. In a new note, Lejuez upgraded Lululemon stock from Neutral to Buy and gave a list of 10 reasons the stock is headed higher.

Lejuez was impressed by Lululemon’s Q2 earnings report and said investors are too concerned about potential threats from, Inc. (NASDAQ: AMZN) and other competitors.

Here’s a rundown of Lejuez’s 10 reasons to own Lululemon (see Lejuez's track record here):

    1. The past two quarters have demonstrated Lululemon’s ability to adapt.
    2. Positive inflection in the tops segment in Q2 demonstrates Lululemon isn’t all about bottoms.
    3. Bras provide a compelling growth opportunity.
    4. There is strong momentum in the men’s business.
    5. The company’s clearance strategy gives it a competitive advantage.
    6. The company is facing easy outerwear comps in Q4.
    7. Forex has transitioned to a near-term tailwind.
    8. Lululemon’s strong cash position provides opportunity for buybacks.
    9. The company is off to a string start to its China expansion.
    10. The market is skeptical of the company’s $4 billion sales target.

These 10 reasons, coupled with a recent meeting with Lululemon management, have convinced Citi that now is the time to buy the stock.

“We believe recent market concerns (AMZN, denim, weather) are overblown, and we believe current levels are an attractive entry point for one of the best performing brands (and long term growth stories) in all of retail,” Lejuez wrote.

In addition to the upgrade, Citi has raised its price target for Lululemon from $62 to $73.

Related Link: 7 Technical Levels Discussed On Friday's PreMarket Prep

Latest Ratings for LULU

Sep 2019Initiates Coverage OnOverweight
Sep 2019MaintainsOutperform
Sep 2019ReiteratesBuy

View More Analyst Ratings for LULU
View the Latest Analyst Ratings

Posted-In: Analyst Color Long Ideas News Upgrades Price Target Analyst Ratings Movers Trading Ideas Best of Benzinga


Related Articles (AMZN + LULU)

View Comments and Join the Discussion!

The Easy Money Has Already Been Made In HP Enterprise

Trading The End (And Beginning) Of Daylight Savings Time