Market Overview

Argus Upgrades Lululemon On Multiple Growth Levers

Share:
Argus Upgrades Lululemon On Multiple Growth Levers
Related LULU
Cowen: Kohl's, Target, Tiffany Are Top Holiday Retail Picks
Rhone Looks To Pioneer An Underserved Premium Mens Activewear Category
Stocks Today: Nvidia Leads Technology Rally; Caterpillar Boosts Dow (Investor's Business Daily)

Lululemon Athletica inc. (NASDAQ: LULU) got some love from one Wall Street analyst who said the company’s growth outlook is among the best in the entire retail industry.

The Analyst

Argus analyst John Staszak upgraded Lululemon from Hold to Buy and set a $150 price target for the stock.

The Thesis

A massive international growth opportunity and a transition toward higher-margin inline sales is a winning recipe for long-term investors, according to Staszak.

“With substantial opportunities to expand outside of North America, particularly in China, a strong brand and a growing number of e-commerce sales, we think lululemon's growth prospects are among the best in the apparel sector,” he said in the upgrade note.

Lululemon is almost exclusively a North American business with female products. However, expansion overseas and into men’s apparel should help drive revenue growth in the long-term, Staszak said.

He said new CEO Calvin McDonald, who joined the company in July, has a long track record of double-digit organic revenue growth, market share gains and online sales growth during his time at Sephora.

Argus is calling for fiscal 2019 EPS of $3.40, up 80 percent from the earnings it reported just last year. McDonald expects earnings growth to continue into 2020, projecting $3.80 in EPS that year. Looking out further into the future, Argus is modeling 15 percent compound annual EPS growth over the next five years.

Price Action

Lululemon stock traded higher by 2.3 percent to $129.30 on Thursday.

Related Links:

3 Retailers Jim Cramer Says Are Winners In A Volatile Sector

UBS: Shift From Performance To Sportswear A Dominant Theme In Athleisure

Latest Ratings for LULU

DateFirmActionFromTo
Oct 2018Canaccord GenuityUpgradesHoldBuy
Oct 2018WedbushUpgradesNeutralOutperform
Oct 2018Cowen & Co.MaintainsOutperformOutperform

View More Analyst Ratings for LULU
View the Latest Analyst Ratings

Posted-In: Argus Calvin McDonald John StaszakAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (LULU)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
ACBIKeefe Bruyette & WoodsUpgrades21.0
COTYBMO CapitalUpgrades12.0
ECCOppenheimerDowngrades0.0
VYGRRaymond JamesUpgrades0.0
ATNXJP MorganUpgrades15.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Your Low Credit Score Could Cost You $45,000

Sony's $2.3B EMI Takeover Deal Faces Opposition From IMPALA