On Thursday, BofA Securities up to date its stance on Lululemon Athletica Inc. (NASDAQ:), rising the worth goal to $440 from the earlier $430 whereas sustaining a Purchase score on the inventory. The revision displays optimism in regards to the firm’s progress prospects, notably within the second half of the 12 months.
Lululemon reported a first-quarter earnings per share (EPS) of $2.54, surpassing the $2.30 estimate, primarily pushed by sturdy gross sales progress. The worldwide gross sales noticed a major improve of 40% on a continuing forex foundation, whereas U.S. gross sales grew by 2%. The corporate additionally benefited from the next gross margin and curiosity earnings.
The administration of Lululemon has reaffirmed its fiscal 12 months 2024 steering, projecting gross sales progress between 11-12% and a slight working margin enlargement of 10 foundation factors. Moreover, the EPS steering has been raised by $0.27, now starting from $14.27 to $14.47, factoring in share repurchases and better curiosity earnings.
In gentle of those developments, BofA Securities has adjusted its fiscal 12 months 2024 EPS estimate for Lululemon, elevating it by $0.70 to $14.27. The brand new worth goal of $440 is predicated on a 17x a number of of the fiscal 12 months 2025 enterprise worth to EBITDA (earnings earlier than curiosity, taxes, depreciation, and amortization) estimate. The analyst highlighted the corporate’s bettering innovation pipeline as a key driver for the anticipated acceleration in gross sales tendencies, particularly with the anticipated enhancement in product newness and availability throughout the ladies’s section.
In different latest information, Lululemon Athletica Inc. has been the main focus of a number of analyst changes. Morgan Stanley lowered its worth goal for Lululemon to $404 however maintained an Chubby score, citing potential for a U.S. gross sales surge and near-term constructive EPS revisions. Then again, BTIG reiterated its Purchase score with a worth goal of $425, expressing confidence within the firm’s fundamentals and future prospects.
TD Cowen additionally reaffirmed its Purchase score on Lululemon however decreased the worth goal to $437, citing the corporate’s sturdy monetary returns regardless of elevated competitors. In the meantime, Citi adjusted its worth goal on Lululemon shares to $415 whereas sustaining a Purchase score, anticipating modest progress within the Americas for fiscal 12 months 2024.
InvestingPro Insights
Following BofA Securities’ optimistic outlook on Lululemon Athletica Inc. (NASDAQ:LULU), InvestingPro information and ideas present extra context for potential buyers. The corporate presently holds a market capitalization of $38.82 billion and has proven spectacular income progress of 18.6% within the final twelve months as of This autumn 2024. This aligns with the constructive gross sales tendencies highlighted by BofA analysts.
InvestingPro Ideas counsel that Lululemon maintains a robust steadiness sheet, holding additional cash than debt, and liquid belongings exceed its short-term obligations, indicating a sturdy monetary place. Furthermore, the corporate is buying and selling at a low P/E ratio relative to near-term earnings progress, with a P/E ratio of 24.96 and a PEG ratio of 0.3, suggesting the inventory could also be undervalued given its progress prospects. That is notably related contemplating the corporate’s inventory is buying and selling close to its 52-week low, which might characterize a shopping for alternative for many who consider within the firm’s long-term potential.
Moreover, whereas Lululemon doesn’t pay a dividend, the corporate has been worthwhile over the past twelve months and analysts predict profitability will proceed this 12 months. For buyers looking for additional insights, InvestingPro affords extra ideas that may be accessed with an unique 10% low cost on a yearly or biyearly Professional and Professional+ subscription utilizing the coupon code PRONEWS24. In whole, there are 11 extra InvestingPro Ideas accessible for Lululemon, offering a complete understanding of the corporate’s monetary well being and inventory efficiency.
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