Market Overview

Stifel Sees Opportunity In Lululemon Pullback, Highlights 'Powerful Business Model'

Stifel Sees Opportunity In Lululemon Pullback, Highlights 'Powerful Business Model'
Related LULU
Lululemon Issues Strong Q4 Guidance, Cowen Projects Upside To Consensus Estimates
Cowen Weighs Puma's Market Share Opportunity Against Potential Athletic Apparel Slowdown, European Concerns
IBD 50 Stocks To Watch: Lululemon Stock Mounts A Comeback (Investor's Business Daily)

Lululemon Athletica inc. (NASDAQ: LULU) received an early Christmas present Sunday in the form of a new sell-side bull. 

The Analyst 

Stifel analyst Jim Duffy upgraded Lululemon from Hold to Buy with a $151 price target.

The Thesis

After delivering several quarters of impressive growth, Lululemon is inevitably facing difficult compares, Duffy said in a note — but the analyst believes double-digit revenue growth can continue. (See his track record here.)

“We view lululemon as one of the highest quality companies in our coverage, and with e-commerce execution now more than 25 percent of revenue, we view it as arguably the most powerful business model."

Despite broader market uncertainty, Duffy said the latest pullback in lululemon shares is an entry point for a high-quality, large-cap growth business with runway.

The apparel brand is only getting started when it comes to executing its e-commerce potential, and trends are playing favorably into the company’s ethos, Duffy said. 

“With market tailwinds from growing global concern for health, fitness and self-actualization, we believe lululemon has a long runway for global growth and advocate owning shares as a core holding."

Lululemon's 2020 objectives of $4 billion in revenue and implied earnings power of $5 are low hurdles, the analyst said. 

Price Action

Lululemon Athletica shares were down 0.1 percent at $119 at the time of publication Monday. 

Related Links:

Lululemon Has Room For Valuation, Earnings Upside This Year

Analyst Stretches Lululemon's Price Target After Meeting With New CEO

Latest Ratings for LULU

Jan 2019BuckinghamUpgradesNeutralBuy
Jan 2019Wells FargoMaintainsOutperformOutperform
Dec 2018Stifel NicolausUpgradesHoldBuy

View More Analyst Ratings for LULU
View the Latest Analyst Ratings

Posted-In: Apparel Jim Duffy retail StifelAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (LULU)

View Comments and Join the Discussion!

Latest Ratings

EMNMorgan StanleyUpgrades90.0
DERMRaymond JamesUpgrades0.0
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.

Mid-Afternoon Market Update: Dow Down Over 350 Points; Sophiris Bio Shares Plummet

Rapid-Fire Pitch: Cargo Chief's C4