Citi analyst Paul Lejuez upgraded Lululemon Athletica (LULU) to Buy from Neutral with a price target of $440, up from $350. The analyst liked the stock going into the Q4 report and feels even better following the results and fiscal 2023 outlook. Lululemon’s inventory-to-sales gap is better than expected with a pathway to further improvement, and the company is seeing no signs of a sales slowdown with Q1 trends starting stronger than expected, the analyst tells investors in a research note. Further, the company’s China growth is poised to "rapidly accelerate" in fiscal 2023 and become a much more meaningful long-term driver, says the firm. It models 20%-plus earnings growth annually through fiscal 2027 as Lululemon "unlocks its global growth potential." CIti adds that shares are Lululemon are more cheaply valued than Nike (NKE).
Published first on TheFly
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