Buy Lululemon (LULU) on Weakness - Cowen

October 20, 2016 10:58 AM EDT
Get Alerts LULU Hot Sheet
Price: $68.50 -0.41%

Rating Summary:
    24 Buy, 13 Hold, 6 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 22 | New: 54
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Cowen analyst Oliver Chen said they would be buyers of Lululemon Athletica Inc. (NASDAQ: LULU) on the recent weakness. The firm maintained an Outperform rating and price target of $80

Chen notes shares are down 28% from its YTD peak given comp and margin fears on greater than expected discounting.

Cowen's view is that LULU's markdowns are not greater than last year; however, the online channel this year through the “we made too much” feature could be more strategically used given improved omnichannel integration. Furthermore, utilization of the online channel for clearance vs. physical stores should help drive healthy full price selling and traffic in bricks and mortar stores.

"Based on our store checks, we believe physical store clearance levels are at healthy and in-controlled levels vs. last year," the analyst said.

For an analyst ratings summary and ratings history on Lululemon Athletica Inc. click here. For more ratings news on Lululemon Athletica Inc. click here.

Shares of Lululemon Athletica Inc. closed at $58.58 yesterday.

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