Lululemon (LULU) Investors Roll Dice on International Growth
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Price: $364.68 --0%
Rating Summary:
32 Buy, 11 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 10 | Down: 8 | New: 8
Rating Summary:
32 Buy, 11 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 10 | Down: 8 | New: 8
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This week athletic apparel company, Lululemon Athletica Inc. (NASDAQ: LULU) reported Q3 results that topped estimates. However, guidance was a bit disappointing at first glance, causing concern in come circles, though shares eventually traded higher.
There are few analysts on Wall Street willing to completely trash LULU. Of the 23 analysts tracked by Streetinsider.com, only 3 have sell ratings. Most (13) rate the company Buy, and about one-third rate the stock Neutral.
Nomura is among those in the Neutral camp. The reason for their caution, unsurprisingly, is valuation. The stock trades at around 30x Nomura's F13 estimates of $2.38 to $2.39. These estimates are higher than current street estimates of $2.25.
Commenting on the market reaction to LULU's guidance, analyst Paul Lejuez said, "the market seems ready to overlook any current flaws in the story in favor of the long term growth opportunities."
So, why are investors so optimistic? The hope is, if LULU can do international what it has done in the U.S. than the growth story is nowhere near over.
The retailer currently has 2 showrooms in Hong Kong, 1 in England, and management has major expansion plans globally.
"LULU provided more detail on its plan to expand globally, adding support to the thesis that it is on its way to being the next great global brand. We believe the company can be successful internationally, though we believe it will be more difficult than expanding into the US," warned Lejuez.
Nomura Securities has a Neutral Lululemon Athletica Inc. (NASDAQ: LULU) with a revised price target of $67.00 (from $62.00).
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 $73.57 yesterday.
There are few analysts on Wall Street willing to completely trash LULU. Of the 23 analysts tracked by Streetinsider.com, only 3 have sell ratings. Most (13) rate the company Buy, and about one-third rate the stock Neutral.
Nomura is among those in the Neutral camp. The reason for their caution, unsurprisingly, is valuation. The stock trades at around 30x Nomura's F13 estimates of $2.38 to $2.39. These estimates are higher than current street estimates of $2.25.
Commenting on the market reaction to LULU's guidance, analyst Paul Lejuez said, "the market seems ready to overlook any current flaws in the story in favor of the long term growth opportunities."
So, why are investors so optimistic? The hope is, if LULU can do international what it has done in the U.S. than the growth story is nowhere near over.
The retailer currently has 2 showrooms in Hong Kong, 1 in England, and management has major expansion plans globally.
"LULU provided more detail on its plan to expand globally, adding support to the thesis that it is on its way to being the next great global brand. We believe the company can be successful internationally, though we believe it will be more difficult than expanding into the US," warned Lejuez.
Nomura Securities has a Neutral Lululemon Athletica Inc. (NASDAQ: LULU) with a revised price target of $67.00 (from $62.00).
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 $73.57 yesterday.
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