Mizuho Securities Upgrades Lululemon Athletica Inc. (LULU) to Buy; Sees Upside Continuing
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Rating Summary:
32 Buy, 11 Hold, 3 Sell
Rating Trend: Down
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 11
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Mizuho Securities upgraded Lululemon Athletica Inc. (NASDAQ: LULU) from Neutral to Buy with a price target of $78.00, noting comp upside, margin inflection and store growth.
Analyst Betty Chen commented, "We are upgrading LULU to Buy and raising our estimates and PT to $78 following strong topline growth and margin inflection, which we believe could continue to drive EPS in FY17. Our positive view stems from: 1) +MSD comps on product newness & AUR increases, 2) gross margin recovery from supply chain initiatives following ~5 pts of decline since FY12, 3) moderated SG&A spend in FY17, and 4) valuation below historical multiples. With a rare combination of comp gains, store growth, and margin expansion, we expect the stock to trade at a premium valuation and outperform the softlines group."
Analyst Betty Chen commented, "We are upgrading LULU to Buy and raising our estimates and PT to $78 following strong topline growth and margin inflection, which we believe could continue to drive EPS in FY17. Our positive view stems from: 1) +MSD comps on product newness & AUR increases, 2) gross margin recovery from supply chain initiatives following ~5 pts of decline since FY12, 3) moderated SG&A spend in FY17, and 4) valuation below historical multiples. With a rare combination of comp gains, store growth, and margin expansion, we expect the stock to trade at a premium valuation and outperform the softlines group."
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 $59.84 yesterday.
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