William Blair analyst Sharon Zackfia has reiterated their bullish stance on LULU stock, giving a Buy rating on May 19.
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Sharon Zackfia’s rating is based on several key factors that suggest a positive outlook for Lululemon Athletica. The company is expected to slightly exceed its revenue and earnings per share guidance for the first quarter, driven by improving domestic trends observed in April. This improvement is anticipated to result in a 7% revenue growth, with e-commerce showing a slightly stronger performance compared to physical stores.
Additionally, while there is an expected slowdown in the Americas due to weaker traffic trends, the overall global outlook remains positive. The company is projected to see a low-teens increase in China Mainland and a high-single-digit growth in other regions. Despite increased markdowns in domestic stores earlier in the quarter, these have been moderated by May, aligning with the previous year’s levels, indicating effective inventory management. These factors collectively support the Buy rating for Lululemon Athletica.
In another report released on May 19, J.P. Morgan also maintained a Buy rating on the stock with a $389.00 price target.