Lululemon (LULU) Earnings Turnaround Likely Underway - Credit Suisse
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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.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View
Related EntitiesCredit Suisse, Standard & Poor's, Earnings, Christian Buss
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