Lululemon's Stock Climbs After Credit Suisse Upgrades On Margin Outlook
Lululemon Athletica Inc.'s stock climbed 1.2% in afternoon trade Friday, and had been up as much as 4.6% earlier in the session, after the yoga-gear maker was upgraded at Credit Suisse. Analyst Christian Buss raised his rating to outperform, after being at neutral since Dec. 13, 2013, because he said he believes demand is "back on track" and margins are "increasingly likely to recover." He raised his stock price target to $64, which is 20% above current levels, from $57."We performed a detailed analysis of Lululemon's initiatives to improve product margin, which suggests modest gains could translate into meaningful upside to street estimates over the next 18 months," Buss wrote in a note to clients. The stock has dropped 15% over the past three months, while the S&P 500 has slipped 4.8%.
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