Lululemon Athletica Inc. (LULU) Growth Story Intact, CEO an Overhang; Wedbush Assumes at Neutral
Wedbush assumed coverage on Lululemon Athletica Inc. (NASDAQ: LULU) with a Neutral rating and a price target of $75.00. Analyst Corinna Freedman expects shares to trade range-bound. In addition, the appointment of a new CEO may underwhelm, creating better entry for long-terms investors. Lululemon's overall growth story remains intact, said the analyst.
"We are assuming coverage of shares of LULU and maintain our NEUTRAL rating as we believe the shares may be range-bound until a CEO successor is announced. We believe the company has overcome its 1H13 Luon issue and see no real lasting brand impairment. We view LULU's current issues as typical growing pains exacerbated by uncertain leadership which could potentially result in further near-term strategic changes. We believe shares adequately price in a rebound of comps, with modest upside for FY13 and a continuation of gross margin recapture to drive EPS upside through 1H14. Though our long-term bias is positive, we expect the announcement of a new CEO to underwhelm investors and could potentially create a better opportunity to add to long-term positions," said Freedman.
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 $69.84 yesterday, with a 52 week range of $59.60-$82.50.
"We are assuming coverage of shares of LULU and maintain our NEUTRAL rating as we believe the shares may be range-bound until a CEO successor is announced. We believe the company has overcome its 1H13 Luon issue and see no real lasting brand impairment. We view LULU's current issues as typical growing pains exacerbated by uncertain leadership which could potentially result in further near-term strategic changes. We believe shares adequately price in a rebound of comps, with modest upside for FY13 and a continuation of gross margin recapture to drive EPS upside through 1H14. Though our long-term bias is positive, we expect the announcement of a new CEO to underwhelm investors and could potentially create a better opportunity to add to long-term positions," said Freedman.
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 $69.84 yesterday, with a 52 week range of $59.60-$82.50.