Lululemon Athletics today
Lululemon Athletics
(As of 11:51 a.m. ET)
- 52 week range
- $226.01
▼
$516.39
- P/E ratio
- 31.44
- Target price
- $372.61
Lululemon NASDAQ: LULU continues to face headwinds like other retailers, but third-quarter results prove the resilience of the business and the sustainability of its growth trajectory. Among the highlights of the report and the market reaction are analysts who are very happy about the news. While one of the outliers suggests the stock is a sell, the rest of the data is bullish, with 19 of 19 price target revisions being raised, including one skeptic.
How do analysts see this stock price? After excluding the high and low, the average of 17 analysts is $401, with 70% of targets, including the $440 high, above consensus. The bottom line is that analysts are forecasting the share price to rise by 15-20% over the next twelve months and the sentiment trend is upward; Analysts will likely continue to raise their target range as the year progresses.
Lululemon’s strong and flexible business produces results
Lululemon had a strong quarter, beating the retail industry average twice as revenue grew 9% and beat MarketBeat’s consensus estimate by 170 basis points. Global growth of 4% contributed to growth, 3% on a currency neutral basis, with international growth offsetting weaker results in the Americas. Revenue in the Americas grew 2%, with new stores offsetting a 2% decline in sales. International segment sales grew 30% at currency rates with store sales increasing 22% and are expected to remain strong and drive growth in 2025.
Margin news is another strong point. The company increased its gross and operating margins, gaining 40 basis points at the gross level and 70 basis points at the operating level to achieve net leveraged results. Diluted earnings of $2.87 rose 13% on an extra-week adjusted basis and beat consensus estimates by $0.15, with margins expected to remain strong throughout the year.
The fourth quarter and fiscal year guidance was improved due to strength in the third quarter and retail trends, resulting in fourth quarter growth targets of a robust 8% to 10% and exceeding both fourth quarter and fiscal year targets analysts’ consensus forecast.
Among the important details is cash flow. The company is growing and improving the quality of its cash flow, allowing it to actively repurchase shares while maintaining a strong balance sheet and the health of the business. At the end of the quarter, balance sheet highlights include year-over-year increases in cash, an 8% increase in inventory, and current and total assets. Liabilities also increased, but were offset by increases in assets, resulting in a 13% increase in equity.
In terms of repurchases, repurchase activity decreased 3% year-over-year, 1.5% year-to-date, and is expected to continue at the same pace in the third quarter into the fourth quarter and into 2025. The board increased the authorization by $1 billion to bring the total amount available to $1.8 billion, enough for four quarters at the current pace.
Lululemon stock price reaches inflection point
Lululemon Athletica Stock Forecast Today
$353.74
Growth potential 2.59%Moderate purchase
Based on ratings from 30 analysts
| High forecast | $540.00 |
|---|---|
| Average forecast | $353.74 |
| Low forecast | $220.00 |
Lululemon Athletica Stock Forecast Details
Lululemon’s stock price performance since the publication is bullish, but there are headwinds in the market. The price rose to around $375, coinciding with a potentially strong resistance point in the middle of a multi-year trading and consolidation range. Because of the gap created by the action, the market may retreat from this level before moving higher. In this scenario, the market could return to the previous session’s opening level of around $345.
However, a strong upward move and analyst reaction could give the market enough momentum to rise without a price pullback. The critical resistance target is near $375 and may soon be broken. In this scenario, this market would face another hurdle around $400, likely less severe than $375 and easily cleared, opening the door for a larger move to the top of the analysts’ range and then to the top of the long-term trading range. .
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