Lululemon bulls call out attractive entry point ahead of earnings next week
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Wells Fargo said on Wednesday that it is still bullish on Lululemon Athletica (NASDAQ:LULU) despite the negative sentiment around the consumer stock.
Analyst Ike Boruchow and team think Lululemon (LULU) is still on track for 14% revenue growth this year, with a strong performance in the international business likely to offset flat growth in North America.
Key to the Wells Fargo Overweight call on LULU is the view that valuation is attractive at the current level.
"Given the negativity priced into LULU, we think it's important to note how much of a discount the name is trading at relative to history (LULU at ~30% discount to multi-year average multiples). Net/net, the stock is cheap today (trading near 2017 lows), something we are not seeing in other high-quality names under coverages (ULTA, TJX, ROST, BURL, NKE)âwhich are all essentially trading at premiums to multiyear average multiples."
On Seeking Alpha, contributors Felix Fung and Geoffrey Seiler have also taken bullish stances on Lululemon (LULU) ahead of earnings day. See the consensus estimates on LULU and earnings history.