Analysts Offer Insights on Consumer Goods Companies: Lululemon Athletica Inc (NASDAQ: LULU) and Quantenna Communications (NASDAQ: QTNA)

By Austin Angelo

Companies in the Consumer Goods sector have received a lot of coverage today as analysts weigh in on Lululemon Athletica Inc (LULUResearch Report) and Quantenna Communications (QTNAResearch Report).

Lululemon Athletica Inc (LULU)

Oppenheimer analyst Brian Nagel maintained a Buy rating on Lululemon Athletica Inc today and set a price target of $190. The company’s shares closed yesterday at $146.80.

Nagel commented:

“We look on the better than expected final Q4:18 (Jan. 2019) results and initial FY19 (Jan. 2020) guidance that Outperform-rated Lululemon (LULU) reported after the close on Wed., Mar. 27th, as nothing short of stellar. In Q4 (Jan. 2019), comparable- company sales rose +17% and gross margin expanded +110 bps, serving as clear evidence that new products from the company are resonating exceedingly well with consumers. Initial 2019 guidance for comparable sales expansion in the low double digits reflects a very healthy business and leaves room for upside, in our view. We view LULU as one of the fastest-growing and healthiest brands in consumer. Our price target of $190 implies upside of more than +15%, even after a strong post-market surge yesterday.”

According to TipRanks.com, Nagel is a 5-star analyst with an average return of 8.2% and a 63.1% success rate. Nagel covers the Services sector, focusing on stocks such as Weight Watchers International, Capri Holdings Limited, and Dick’s Sporting Goods.

The word on The Street in general, suggests a Strong Buy analyst consensus rating for Lululemon Athletica Inc with a $172.62 average price target, a 17.6% upside from current levels. In a report issued on March 20, Barclays also reiterated a Buy rating on the stock with a $200 price target.

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Quantenna Communications (QTNA)

In a report released today, Quinn Bolton from Needham downgraded Quantenna Communications to Hold. The company’s shares closed yesterday at $20.50, close to its 52-week high of $21.65.

Bolton commented:

“Quantenna has entered into a definitive agreement to be acquired by ON Semiconductor for $24.50 per share in an all-cash transaction. Subject to approval by QTNA shareholder and regulatory agencies, the transaction is expected to close in approximately six months. While the $24.50 per share takeout price is only a ~20% premium to yesterday’s closing price of $20.50, the takeout price represents a 39% premium to QTNA’s 50-day moving average price of $17.59. Reflecting the all- cash nature of the bid and the low likelihood of another bidder (QTNA was advised by Qatalyst Partners so we imagine the deal was shopped), we do not see upside beyond the $24.50 price. With QTNA shares trading at ~$24.10 post the announcement, we downgrade the stock to Hold from Strong Buy. We encourage shareholders to vote in favor of the transaction.”

According to TipRanks.com, Bolton is a top 100 analyst with an average return of 15.0% and a 65.8% success rate. Bolton covers the Consumer Goods sector, focusing on stocks such as MACOM Technology Solutions Holdings Inc, Sequans Communications S A, and Applied Materials Inc.

Quantenna Communications has an analyst consensus of Moderate Buy, with a price target consensus of $23.50, which is a 14.6% upside from current levels. In a report released today, Barclays also upgraded the stock to Hold with a $24 price target.

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