Shares of Lululemon Athletica Inc. climbed 2.3% in premarket trade Wednesday, after the yoga gear maker was upgraded at Stifel Nicolaus, which cited improved valuation after the recent plunge. Analyst Jim Duffy raised his rating to buy from hold, and set a 12-month stock price target at $60, which is 16% above Tuesday's closing price of $51.70. The stock had plummeted 23% on March 30, the fell further to a 16-month closing low of $49.43 on April 5, after a profit warning. Duffy said that after a "merchandising misstep" in early Spring and a disappointing first-quarter outlook, the stock was hovering near historically low price-to-earnings multiples, with the premium to the S&P 500 among the smallest in history. "Valuation assessment suggests the reset in [Lululemon] shares is presenting opportunity for long-term investors," Duffy wrote in a note to clients. The stock has tumbled 20% year to date through Tuesday, while the SPDR S&P Retail ETF has slipped 3.6% and the S&P 500 has gained 5.1%.
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