Lululemon gets an analyst boost

Shares were up slightly after a Wedbush upgrade. Can it reach its turnaround aspirations this year?

By Motley Fool Investor Beat Mar 31, 2014 2:04PM
Shares of Lululemon Athletica (LULU) were up slightly Monday after Wedbush gave the stock an "outperform" rating, up from its previous "neutral." On Monday's Stock of the Day, host Erin Kennedy and Motley Fool analyst Jason Moser discuss Lululemon and why up until now, Jason has passed over the stock due to valuation.

Now, however, with the valuation at a more reasonable level, new leadership for the company, and its continued brand strength, Jason is beginning to see opportunity here.
The stock has been beaten up recently for a number of reasons, including the defective material used that caused some of the company's yoga pants to be transparent in some situations, as well as the difficult retail environment over this holiday season that caused many retailers to struggle. Credit: © Andy Clark/Reuters

Caption: A customer enters the Lululemon store in downtown Vancouver, British Columbia November 8, 2013

Despite these short-term stumbling blocks, Jason still sees a long growth story here ahead.

Still, there will be things to watch for. While the leadership change was a positive one, Jason wants to see the company keeping its focus on its plan for the future. He'll be looking for the company to build out its product offerings and become more things to more people, but if the company can continue to do that, he sees Monday's price as a fair entry point for a stock that has long been a bit too expensive.

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Tags: LULU
1Comment
Apr 1, 2014 11:26AM
avatar
Just another "financial expert" trying to hype up a battered stock for personal gain.  This company has issues and more competition has entered the yoga arena.  LL makes poor quality clothing that doesn't fit but a few select women and they are grossly overpriced.  Time to move on from this fashion fad...
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