Lululemon stock leaps after JP Morgan raises earnings expectations
Robert Way

Lululemon athletica (NASDAQ:LULU) shares leapt over 7% on Tuesday after JP Morgan analyst Matthew Boss boosted his EPS estimates for the retailerâs Q3 report.

Boss raised his expectations for revenue growth to 29.6% and his EPS estimate to $2.05. The former is above the 25% guided by management in its Q2 earnings release while the latter is notably above the Wall Street consensus of $1.96 anticipated for the early December report.

He said that recent fieldwork performed by his team reflects strong inventory management, positive sales trends across categories but especially in menswear, growth into new categories like footwear, and relatively high exposure to affluent consumers less impacted by inflation motivated the increased bullishness. The inventory management and strong demand is also seen as a key to defending gross margins, which Boss sees as on track for long-term expansion.

Boss reiterated a Buy-equivalent rating on the stock, but trimmed his price target modestly to $413 from a prior $464. 
Read more on earnings expectations for the Canadian apparel company.