Lululemon is starting to seem like Nike, Cowen mentioned on Tuesday because it raised its value goal on the inventory to $250.The agency mentioned
Lululemon is starting to seem like Nike, Cowen mentioned on Tuesday because it raised its value goal on the inventory to $250.
The agency mentioned Nike’s valuation supplies a map for Lululemon’s future, and that when making use of Nike’s a number of to Lululemon’s monetary metrics and progress alternatives, there is a path towards a $40 billion market cap, a $300-plus inventory value and $1 billion in annual free money movement.
Lululemon’s market cap is at the moment $29 billion, whereas Nike’s is $146 billion.
“Assuming LULU can maintain a NKE-like free money movement a number of — we see a path to a $40B market cap. We view LULU progress, sturdiness and ROIC profile as most just like NKE,” the agency’s analysts lead by John Kernan mentioned in a word to purchasers Tuesday.
The agency has an outperform score on the corporate, and the $250 goal represents an 11% upside to the place the inventory at the moment trades.
Cowen mentioned that the corporate’s rising menswear and worldwide divisions will drive gross sales, whereas additionally noting that customers are “extremely loyal to the model.” Moreover, Lululemon’s new streetwear-inspired Lab line ought to entice new prospects, and the brand new self-care and footwear traces signify extra alternatives for model enlargement.
“Now we have confidence that new product, built-in advertising, and on-line momentum mixed with loyalty, a wholesome high-end buyer demographic, and athleisure…