Lululemon Athletica Inc (LULU) Received its Third Buy in a Row

By Ryan Adsit

After Merrill Lynch and Robert W. Baird gave Lululemon Athletica Inc (NASDAQ: LULU) a Buy rating last month, the company received another Buy, this time from Guggenheim. Analyst Robert Drbul maintained a Buy rating on Lululemon Athletica Inc yesterday and set a price target of $180. The company’s shares closed yesterday at $146.80.

Drbul noted:

“We believe the results demonstrate continued momentum in the business globally. LULU continues to drive outsized results across its portfolio and we are encouraged by the continued momentum. Given our belief LULU should drive continued top-line strength, we are raising our top-line/EPS estimates as we believe the brand has a significant global growth opportunity. We look forward to learning more about LULU’s L-T strategy at its upcoming Investor Day; reiterate BUY and raise PT to $180 from $165. LULU reported 4Q18 EPS of $1.85, above our estimate of $1.74, including a stronger- than-expected top-line (+26% YoY to $1.17bn vs. our +24%). Total comps rose 17% (CC; +16% reported), with an impressive 2-year stack of +28% (CC). We would note comps increased at a strong HT% rate (CC) throughout 2018.”

According to TipRanks.com, Drbul is a 5-star analyst with an average return of 10.5% and a 66.8% success rate. Drbul covers the Services sector, focusing on stocks such as National Vision Holdings Inc, Capri Holdings Limited, and Ascena Retail Group.

The word on The Street in general, suggests a Strong Buy analyst consensus rating for Lululemon Athletica Inc with a $171.46 average price target, implying a 16.8% upside from current levels. In a report issued on March 12, Robert W. Baird also maintained a Buy rating on the stock with a $170 price target.

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Based on Lululemon Athletica Inc’s latest earnings release for the quarter ending October 31, the company reported a quarterly net profit of $94.41 million. In comparison, last year the company had a net profit of $120 million.

Based on the recent corporate insider activity of 32 insiders, corporate insider sentiment is negative on the stock.

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lululemon athletica, Inc. engages in the design, distribution, and retail of athletic apparel and accessories. It company operates through the following segments: Company-Operated Stores, Direct to Consumer, and Other. The Company-Operated Stores segment comprises of lululemon and ivivva brands; and specialize athletic wear for female youth.