Lululemon’s stock rallies after Stifel analyst says it’s time to buy
Shares of Lululemon Athletica Inc. [: lulu] rallied 1.4% in premarket trade Monday, after Stifel Nicolaus analyst Jim Duffy turned bullish on the yoga gear marker, citing valuation and the potential for upside in fiscal fourth-quarter and 2019 estimates. Duffy upgraded the stock to buy from hold and set a stock price target of $151, which is 27% above Friday’s closing price of $119.12. He said that while a deceleration in same-store sales is inevitable, given difficult comparisons with a year ago, he believes revenue growth in the double-digit percentage range can continue. "While there is no shortage of uncertainty in the market, we view the pullback in [Lululemon] shares as an entry point for a high quality large cap growth business with runway," Duffy wrote in a note to clients. "We have been favorably impressed with the leadership team and believe the company is only just beginning to execute to the e-commerce potential." The stock closed Friday 27% below its Sept. 28 record close of $162.49. Over the same time, the Dow Jones Industrial Average DJIA, -2.02% has lost about 2,358 points, or 8.9%.
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