Lululemon Athletica (LULU) Stock Price Target Hiked at BMO Capital

NEW YORK (TheStreet) -- Lululemon Athletica (LULU) stock had its price target increased to $63 from $57 by analysts at BMO Capital Markets who maintained their "market perform" rating.

The firm cited strong first quarter 2015 results for the price target raise.

The yoga apparel retailer released its results yesterday, earning 34 cents per share on sales of $423.5 million, compared to 34 cents per share on sales of $384.6 million in the same quarter a year ago.

The company beat BMO Capital Markets' analysts consensus estimate of 33 cents per share for the latest quarter.

"Business accelerated during the latter part of the quarter as LULU's inventory position improved, with a strong response to new product," analysts said.

Canada-based Lululemon Athletica offers a range of yoga-inspired performance apparel and accessories for women, men and female youth such as fitness pants, shorts, tops and jackets, which are designed for healthy lifestyle activities.

On Wednesday, shares are falling 1.78% to $67.05.

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 a number of strengths, 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, increase in net income and expanding profit margins. We feel its 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."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • LULU's revenue growth has slightly outpaced the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 15.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LULU has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.24, which clearly demonstrates the ability to cover short-term cash needs.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 42.74% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Textiles, Apparel & Luxury Goods industry average. The net income increased by 1.1% when compared to the same quarter one year prior, going from $109.69 million to $110.85 million.
  • The gross profit margin for LULULEMON ATHLETICA INC is rather high; currently it is at 54.22%. Regardless of LULU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LULU's net profit margin of 18.39% compares favorably to the industry average.
  • You can view the full analysis from the report here: LULU Ratings Report

More from Markets

Stocks Tumble as Dow Heads for Eighth Straight Drop

Stocks Tumble as Dow Heads for Eighth Straight Drop

Video: Here's Why One Markets Pro Is Raising Cash Right Now

Video: Here's Why One Markets Pro Is Raising Cash Right Now

Mesoblast Soars on Stem-Cell Treatment Data

Mesoblast Soars on Stem-Cell Treatment Data

Trade Tussle Sinks Stocks, Oil Slides, Micron, Daimler - 5 Things You Must Know

Trade Tussle Sinks Stocks, Oil Slides, Micron, Daimler - 5 Things You Must Know

Bank of England Holds Rates Steady, But Vote Shift Signals Hawkish Tone

Bank of England Holds Rates Steady, But Vote Shift Signals Hawkish Tone