Cowen Lowers Price Target on lululemon (LULU) to $52 on Weak Print, But Still Reasons to Remain Bullish
Cowen maintained an Outperform rating on Lululemon Athletica Inc. (NASDAQ: LULU), and cut the price target to $52.00 (from $62.00), following the company's 3Q earnings report. Focus remains on GM, which suffered on airfreight & markdowns. lululemon's women's business remains strong, with an acceleration in pant & bra categories. The re-launched pant wall hit stores at the beginning of 3Q, and customer response has been very positive, with women's pants comping +27% during the quarter.
Analyst Oliver Chen commented, "We are most encouraged w/select category outperformance (pants +27%, bras +18%), & believe oppty exists to perfect women's tops. Focus remains on GM, which suffered on airfreight & markdowns. Inventories +56% with an elevation to con’t in 4Q as in-transit levels increase, with normalization in 1Q."
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Shares of Lululemon Athletica Inc. closed at $52.16 yesterday.