Bulls all across Wall Street are defending Lululemon (NASDAQ:LULU) for a quarter that they believe displayed underlying resilience against the challenging macroeconomic backdrop.
The athletic clothing behemoth’s capacity to successfully manage a difficult and fluid consumer environment in the U.S. and around the world impressed Oppenheimer, according to its initial analysis of recent trends at LULU and feedback from the organization’s senior leadership. According to analyst Brian Nagel, Lulu stock’s continuing strong fundamentals are in contrast with the post-earnings drop downturn.
“In our view, it is more evident that LULU’s powerful digitally enabled infrastructure and superior merchandising are allowing it to take an even bigger share,” said Nagel. “This is particularly true if lesser firms stumble.” Oppenheimer is optimistic about the future of athleisure and considers LULU to be a top choice in the industry.
LULU Stock Analyzed
Also complimentary of the report was Morgan Stanley. Despite the fact that LULU’s inventory growth probably disappointed those who were hoping for a sequential improvement, the company’s fundamentals are still strong, and its capacity to generate exceptional demand in the face of a challenging macro-consumer environment is still impressive, according to the firm. It should be noted that Morgan Stanley analyst Alex Straton believes that the revised full-year projection is conservative, given historical and QTD patterns, which allows for a potential increase at the ICR conference in January. With a higher price objective of $387, Straton and the team maintained their Overweight rating on LULU.
After a great Q3 revenue beat in the third quarter and a positive assessment of holiday sales, which included the biggest Black Friday in company history, Bank of America reiterated its Buy rating on LULU.
According to senior analyst Lorraine Hutchinson, “We remain at ease with LULU’s large inventory (+85% y/y) and anticipate markdowns will stay well controlled due to the high core mix (45%), robust demand patterns, and seasonal product assortment.”
In premarket trading on Friday, Lululemon stock fell 6.25%. Read more on LULU earnings call transcript.
Featured Image: Unsplash @ Marco Tjokro
Author Jowi Kwasu 
