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Lululemon's Recent Pullback Creates Attractive Entry Point, Wedbush Says In Upgrade

Lululemon's Recent Pullback Creates Attractive Entry Point, Wedbush Says In Upgrade
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Lululemon Athletica Inc. (NASDAQ: LULU) received a sell-side upgrade Monday after a pullback in shares that Wedbush said is likely due to the market sell-off rather than a shift in company fundamentals. 

The Analyst 

Wedbush analyst Jen Redding upgraded Lululemon from Neutral to Outperform rating with a $176 price target.

The Thesis

Lululemon shares fell along with the market as a whole, Redding in the Monday upgrade note. (See her track record here.) 

Shares have declined nearly 8 percent over the past month. 

Redding said she's comfortable with a forecast for above-consensus third quarter numbers on strong data that's indicative of upside in gross margin, revenue, total company same-store sales and direct-to-consumer comps.

“We have long viewed lululemon as an impressive growth story, with a best-in-class retail leadership team at the helm, and we continue to see the company’s cutting-edge data analytics and technology platforms on the forefront of wins in the years to come." 

Lululemon’s growth opportunities are in menswear and international, where it has promising expansion opportunities, the analyst said. 

“LULU continues to thrive, and we are impressed and encouraged by lululemon’s near-and long-term trends. We look for a strong holiday season ahead across U.S. retail, and we see LULU as well positioned to capitalize on it."

Price Action

Lululemon shares were up 0.15 percent at $143.93 at the time of publication Monday. 

Related Links:

Lululemon Has Room For Valuation, Earnings Upside This Year

Jim Cramer Shares His Thoughts On Lululemon And Canada Goose

Photo courtesy of Lululemon. 

Latest Ratings for LULU

Jan 2019BuckinghamUpgradesNeutralBuy
Jan 2019Wells FargoMaintainsOutperformOutperform
Dec 2018Stifel NicolausUpgradesHoldBuy

View More Analyst Ratings for LULU
View the Latest Analyst Ratings

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