Shares of Lululemon Athletica Inc (NASDAQ: LULU) have shot up 35% in just over a month but Truist Securities is convinced the stock still has a lot more room to run.
Beth Reed sees upside to $495 in Lululemon
Analyst Beth Reed on Tuesday upgraded the Canadian athletic apparel retailer to “buy” with a price target of $495 a share that represents another 25% upside from here. In her note, she said:
LULU has momentum beyond the pandemic driven by consumer prioritization of health & wellness, a growing TAM, improved store traffic/inventory levels, and modest go-forward EBIT margin expansion.
Reed is particularly interested in Lululemon as it caters primarily to higher income customer base that helps boost its pricing power; a key for success in an inflationary environment. She expects the retailer to offer solid guidance for the next five years at its “analyst day” on Wednesday.
Jon Najarian is also bullish on Lululemon
Late last month, Lululemon reported record sales for its fiscal 2021. Who’s also bullish on this stock is MarketRebellion.com’s Jon Najarian. This afternoon on CNBC’s “Halftime Report”, he said:
I think this is the one you hold on to despite it having done so well. I don’t see the competition out there even from the big producers like Nike. I don’t see people migrating or being nearly as loyal to other brands as they are to Lulu.
For the current quarter, Lululemon forecasts its revenue to fall between $1.53 billion and $1.55 billion. It expects $1.380 to $1.430 of per-share earnings in Q1 – both ahead of the Street consensus.
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