NEW YORK (TheStreet) -- Shares of Lululemon Athletica Inc. (LULU) - Get Lululemon Athletica Inc (LULU) Report are higher by 4.89% to $69.65 at the start of trading on Wednesday morning, after analysts at Sterne Agee upgraded the yoga pants maker to "buy" from "neutral."
The firm said it raised its rating on the designer and retailer of athletic apparel following its meeting with the company's new CFO.
Stern Agee has a $77 price target on Lululemon stock.
The firm believes that Lululemon's margins and sales will grow, and that investments the company has made should pay off sooner than expected, possibly as soon as the fourth quarter, theflyonthewall.com reports, adding that Sterne Agee is upbeat on the company's products and operational changes.
Insight from TheStreet's Research Team:
Lululemon is a core holding of Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. During the most recent weekly roundup, this is what Jim Cramer, Portfolio Manager, and Jack Mohr, Director of Research Action Alerts Plus had to say about the stock:
The shares charged higher this week after last week's strong report. LULU's 4Q beat with better-than-expected comps represents clear signs, in our view, that management's strategies to reignite the product engine and strengthen its business platform are bearing fruit.
The clear leader in its category and only pure play, we see LULU as one of the best growth stories in specialty retail. While sales and EPS will be held down this year by FX, ports delays and investments, we have confidence in the company's 2016 story with a clear road map to higher sales and margins. Our target is $80.
-Jim Cramer and Jack Mohr 'Weekly Roundup' Originally Published on 4/3/2015 on Action Alerts PLUS.
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Separately, TheStreet Ratings team rates LULULEMON ATHLETICA INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate LULULEMON ATHLETICA INC (LULU) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
You can view the full analysis from the report here: LULU Ratings Report