Wedbush Raises Price Target as lululemon athletica (LULU) Sets 2020 Targets
Wedbush reiterated an Outperform rating on Lululemon Athletica Inc. (NASDAQ: LULU), and raised the price target to $80.00 (from $72.00), following the company's 4Q earnings report. 4Q easily topped expectations, with SSS hitting +11% versus raised guidance of +HSD. Momentum has continued into 1Q, though executives noted traffic had slowed modestly from 4Q levels.
Analyst Morry Brown commented, "LULU shifting to offense from defense as 2015 challenges give way to 2016 margin opportunity. The 4Q15 conference call appeared to represent a pivot point for LULU management, as executives focused attention on near-term opportunities (margin gains in 2016) and outlined long-term revenue and EPS targets for 2020 (including detailed compositional assumptions). This represents a step forward, after 2015 inventory imbalances derailed the narrative and trumped strong top-line performance. We believe 2016 numbers are biased to the upside and expect continued SSS momentum, 2016’s return to GM expansion, and the long-term growth opportunity of the brand to support shares."
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Shares of Lululemon Athletica Inc. closed at $67.80 yesterday.