Lululemon (LULU) was initiated with a "buy" rating and a price target of $67 at Needham & Co. on Wednesday morning.
The firm saw Lululemon's biggest risk being comp deceleration following years of growth. However, the firm noted a slowdown in this trend beginning at the start of the year and sees expectations as reset.
"At the same time, LULU's long-term growth levers, including international expansion, men's, and tops, seem to have solid traction while ecommerce also appears to be back on track following a hiccup in 1Q17," the firm said in a note. "We also view Lulu's margin profile, already among the best in retail, as poised to improve further based on structural mix changes (new and old), and the moderation of SG&A spend."
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