Nomura Securities Maintains a 'Neutral' on Lululemon Athletica (LULU); Raising Numbers on New Tax Rate Norm
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Price: $81.46 +1.04%
Rating Summary:
12 Buy, 10 Hold, 6 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 25 | New: 24
Rating Summary:
12 Buy, 10 Hold, 6 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 25 | New: 24
Trade LULU Now!
Nomura Securities maintains a 'Neutral' on Lululemon Athletica Inc. (NASDAQ: LULU) price target of $62.00 (from $55.00)
Analyst, Paul Lejuez, said, "We think the simple answer behind the recent ~12% lift in LULU’s stock is that the ~29% new normal tax rate announced results in out-year earnings increasing by 12%. The lower tax rate results from a change in transfer pricing. Some might say that is low quality, but from a valuation perspective if future cash flows go up by 12%, it makes sense the stock would as well. Using a normalized tax rate of 36.5%, EPS would have been $0.31, in line with consensus, but below our previous $0.33 estimate. We are raising our estimates and target price based on a lower tax rate. LULU, in our view, remains a very attractive growth story long term, and the company is well positioned to exceed guidance in 3Q/4Q, but trading at ~31x our F13E EPS, valuation remains a hurdle keeping us on the sidelines. 2Q12E EPS from $0.33 to $0.39; 3Q12E EPS from $0.34 to $0.37; 4Q12E EPS from $0.71 to $0.77; F12E EPS from $1.70 to $1.85; F13E EPS from $2.13 to $2.38."
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 $77.14 yesterday, with a 52 week range of $41.70-$81.09.
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Analyst, Paul Lejuez, said, "We think the simple answer behind the recent ~12% lift in LULU’s stock is that the ~29% new normal tax rate announced results in out-year earnings increasing by 12%. The lower tax rate results from a change in transfer pricing. Some might say that is low quality, but from a valuation perspective if future cash flows go up by 12%, it makes sense the stock would as well. Using a normalized tax rate of 36.5%, EPS would have been $0.31, in line with consensus, but below our previous $0.33 estimate. We are raising our estimates and target price based on a lower tax rate. LULU, in our view, remains a very attractive growth story long term, and the company is well positioned to exceed guidance in 3Q/4Q, but trading at ~31x our F13E EPS, valuation remains a hurdle keeping us on the sidelines. 2Q12E EPS from $0.33 to $0.39; 3Q12E EPS from $0.34 to $0.37; 4Q12E EPS from $0.71 to $0.77; F12E EPS from $1.70 to $1.85; F13E EPS from $2.13 to $2.38."
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 $77.14 yesterday, with a 52 week range of $41.70-$81.09.
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