Lululemon (LULU) Earnings Turnaround Likely Underway - Credit Suisse
- Top 10 News for 10/17 - 10/21: Merger Rumors Abound; CEOs Depart; Tesla Kicks Autopilot Up A Notch
- Wall Street ends little changed; Microsoft hits record
- AT&T (T) in Advanced Talks to Acquire Time Warner (TWX) - DJ
- Rockwell Automation (ROK) Said to Attract Takeover Interest from Schneider Electric - Source
- British American Tobacco Offers to Acquire Remaining Shares of Reynolds American (RAI) for $56.50/Share
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.
Credit Suisse analyst C. Buss reiterated an Outperform rating and $76 price target on Lululemon Athletica Inc. (NASDAQ: LULU), saying their proprietary pricing and inventory analysis suggests lululemon's long-awaited earnings turnaround is likely underway, driven by a best-in-class pricing strategy, normalized inventory levels, and supply-chain driven margin expansion.
That said, with the stock up 80% from trough levels in November, versus the S&P 500 up 6%, and shares now trading at 30x P/E, the likelihood of a multi-year merchandise margin expansion phase now seems well-embedded in expectations.
Buss said this means top-line trends must maintain the momentum seen year-to-date in order to deliver earnings upside, which we see as the most likely catalyst for further upside to shares.
Shares of Lululemon Athletica Inc. closed at $78.19 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Stifel Upgrades PayPal (PYPL) to Buy Following 'Solid' Q3 Results
- Jefferies Cuts Price Target on Boston Beer Co. (SAM) to $140 Following Weak 3Q
- Jefferies Cuts Price Target on Crown Holdings (CCK) Following 3Q
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View
Related EntitiesCredit Suisse, Standard & Poor's, Earnings, Christian Buss
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!