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Lululemon Analyst Says Mirror Acquisition Is A Win-Win

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Lululemon Analyst Says Mirror Acquisition Is A Win-Win

Lululemon’s (NASDAQ: LULU) acquisition of Mirror is mutually beneficial for both companies, according to Raymond James. 

The Lulumeon Analyst: Matthew McClintock reiterated a Strong Buy rating on Lululemon. 

The Lululemon Thesis: McClintock estimated that Mirror has the potential to reach $2.5 billion in revenue and contribute an additional 50 cents to Lululemon's EPS by 2023. 

The analyst named the following as growth drivers:

  • Mirror’s partnership with Lululemon creates a potential distribution advantage over other fitness brands. 
  • Mirror could reach over 2 million subscribers by 2023.
  • Mirror’s customer acquisition costs will be lower considering the traffic levels in Lululemon’s physical shops.
  • Mirror expands Lulu’s reach to a larger digital platform that has been intensified by the pandemic and the need for an at-home fitness device market.

To that end, “Mirror is perfectly positioned to capture more than its fair share,” McClintock said. 

LULU Price Action: Lululemon shares ended Wednesday's session 2.97% higher at $345.33. 

Public domain photo via Wikimedia

Latest Ratings for LULU

DateFirmActionFromTo
Sep 2020Argus ResearchMaintainsBuy
Sep 2020Morgan StanleyMaintainsEqual-Weight
Sep 2020BarclaysMaintainsOverweight

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