Lululemon Analysts Bullish After Q3 Print Amid High Expectations

Lululemon Analysts Bullish After Q3 Print Amid High Expectations

Lululemon Athletica Inc LULU shares are trading down sharply despite the retailer's third-quarter earnings and sales beat on Wednesday. Here's what Wall Street analysts have to say.

Piper Jaffray: Lululemon Loyalty Program Shows Promise

Analyst Erinn Murphy remains bullish on Lululemon and said she continues to see multiple catalysts driving material upside to Wall Street estimates over the near-term. 

“We continue to see multiple drivers of upward revisions looking forward including category expansion, men’s growth (planned to double by FY23), China rollout, digital sales mix, and loyalty program,” the analyst said in a Wednesday note. 

Lululemon’s new loyalty program has the potential to drive over $1 in EPS over time, she said. 

Piper Jaffray maintained an Overweight rating and raised the price target from $244 to $245.

KeyBanc: Lululemon's Brand Strength Remains Intact

Lululemon’s third-quarter performance highlights the strength of the brand and its product, KeyBanc Capital Markets analyst Edward Yruma said in a Wednesday note. 

“The company remains on track to achieve its 5-year plan by 2023, as international strength continues. China e-commerce grew over 60% in 3Q and reported record sales on Singles Day and realized full-price sell-through,” the analyst said. 

The athleisure brand continues to expand its bra category and push into further offerings, initiatives Yruma said will take share from traditional retailers like L Brands Inc LB’s Victoria Secret.

KeyBanc maintained a Sector Weight rating on Lululemon. 

Raymond James: Upside Persists For Lululemon 

Significant upside remains for Lululemon’s stock, Raymond James analyst Matthew McClintock said in a Wednesday note, adding that he views the stock drop as a buying opportunity.

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