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What you need to know
- Lululemon stock soared a week after it reported third-quarter results that exceeded the expectations. It also increased its outlook for full-year.
- Lululemon’s price target has been raised by multiple analysts, who cite the growth in China and both U.S.A.
- Stifel analyst said Lululemon was positioned for new customer additions as well as revenue growth per client.
Lululemon shares (LULU), which are the company’s athletic clothing, soared Friday after it beat earnings expectations for its third quarter. Analysts also weighed in, offering bullish price target.
Morgan Stanley has announced its results plus an upgraded full-year outlook from the company. “left little for the bears to point to, with US growth stabilizing [and] women’s and China accelerating.” It reiterated the firm’s “overweight” Rating and increased its target price to $414.
Lululemon has raised its revenue projection for the full year to $10.452 to $10.487 billion. This is an increase from the previous range between $10.375 to $10.475 billion.
Analysts Call Lululemon 'Uniquely Positioned' for Growth
Stifel analysts raised their price target from $370 to $438 and maintained the a “buy” rating. This represents an approximately 7% premium, after Lululemon’s shares rose 18% Friday to reach an intraday peak of $408.
“We see LULU uniquely positioned at the intersection of secular trends and believe international growth contribution is under-appreciated,” Stifel analysts stated in a Thursday report. Stifel analysts said in a report Thursday that the company was likely to “sustain strong growth” Addition of new customers will increase the revenue generated per customer.
Analysts’ optimism follows Chief Executive (CEO), Calvin McDonald’s acknowledgement of the company’s shortcomings last quarter. “newness” Problem: Lower conversion rates due to fewer products that are updated seasonally.
Lululemon stock was up 16% on Friday at 401.52, but it will have lost over a fifth in value by the year 2024.
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