Wall Street Raves About Lululemon's Analyst Day

Lululemon Athletica, inc. LULU hosted its analyst day this week, and it brought big announcements from an apparel company that has gained a lot of momentum in recent months. 

Arguably, the biggest revelation was the announcement that Lululemon is entering the footwear business. Here's what the sell-side had to say. 

Wells Fargo

It's unsurprising that Lululemon's analyst day was a bullish affair, said analyst Ike Boruchow.

The most compelling opportunities are on the international front, as the company is significantly underpenetrated overseas, with a significant amount of white space, the analyst said. 

Lululemon is taking steps to become a true dual-gender brand, and penetration on the mens side of the business will approach 30 percent by 2023, Boruchow said. 

Wells Fargo maintained an Outperform on Lululemon with a price targed lifted from $190 to $200.

UBS 

Lululemon has exceptional growth potential, but it's priced into the stock, said analyst Jay Sole.

The company is taking advantage of all the key positive trends occurring in softlines — health and wellness, e-commerce and international growth — while employing industry best practices in key areas such as omnichannel retailing, supply chain and digital consumer engagement, the analyst said. 

“Only Nike Inc NKE, among the companies we cover, can match LULU in this regard, in our view. The one lingering risk we can't dismiss is fashion," Sole said. 

"LULU, wisely, is committed to staying rooted in sport. Yet the products showcased increasingly look like Streetwear. We think it will be hard for LULU to stay as 'on-trend' as it is now consistently over the long-term." 

UBS maintained a Neutral rating and raised the price target from $176 to $182.

Bank Of America Merrill Lynch

Lululemon presented a clear roadmap to achieving its five-year targets while positioning for growth beyond 2023, said analyst Rafe Jadrosich said

The analyst maintained a Buy rating and raised the price target from $193 to $200.

Canaccord Genuity 

Analyst Camilo Lyon reiterated a Buy rating and raised the price target from $186 to $191.

When it comes to footwear, Lyon said he believes the company will take a slow and methodical approach to the category to ensure a unique point of view is offered.

“Given the nascency of the idea and long development cycles, we are not likely to see LULU-branded footwear in stores for at least two years, we believe.”

KeyBanc Capital Markets 

Lululemon’s approach to innovation is based around the "science of feel" as designers look to solve for an athlete’s needs through fabric and fit improvements, said analyst Edward Yruma.

The company’s commitment to product innovation is what reinforces the brand's compelling product advantage, the analyst said. 

KeyBanc maintained a Sector Weight rating on Lululemon. 

Cowen 

Lastly, analyst John Kernan reiterated an Outperform rating with a $192 price target.

“We have confidence that new product, integrated marketing and online momentum combined with loyalty, a healthy high-end customer demographic and athleisure fashion trends will yield traffic, improving conversion and comps,” the analyst said. 

Price Action 

Lululemon shares were down 0.11 percent at $177.09 at the close Friday. 

Related Links: 

Retail Expert: A Lululemon Footwear Business Could Surpass Apparel Business If Done Right

Bank Of America: Expect Lululemon To Continue To Take Market Share

Public domain photo via Wikimedia.