Lululemon's Stock Rallies After Wedbush Puts It On a 'best Ideas' List

Lululemon Athletica Inc.'s stock climbed 1% in morning trade Thursday, after Wedbush Securities added the yoga gear maker's shares to its 'best ideas list,' citing expectations that same-store-sales growth momentum will likely continue throughout this year. Analyst Morry Brown kept the rating at outperform, and the stock price target at $78, which is 18% above current levels. Brown believes Lululemon's fiscal second-quarter results, which are scheduled to be released before the market opens on Sept. 10, "should provide a positive catalyst to the shares." Brown believes the new pant wall Lululemon unveiled recently, which assorts pants by fit and activity rather than by silhouette, as well as increased prices, could boost sales, margins and average unit retail (AUR). "Our channel checks continue to note positive traffic and sell through as well as successful price increases on seasonal items," Brown wrote in a note to clients. The stock has climbed 7.8% over the past three months, while the S&P 500 has lost 6.9%.