It is no surprise that businesses are increasingly excited about China. With over a billion people in the country, it represents a market that could be enormous, and open for a wide range of goods and services. Athleisure wear company Lululemon Athletica (LULU) is discovering that point and shares rose 16% in New York trading.
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Morningstar senior equity analyst, David Swartz, recently sat down for an interview in which he made it clear: Lululemon’s push into China is paying off. While sales in the U.S. are slowing, its sales growth internationally is improving by a wider margin.
China is a huge part of this, but not necessarily alone; Swartz also pointed to Europe and other countries as support. But like Swartz said: “Right now, Lululemon is opening most of its stores in China, and that investment really seems to be paying off.”
Holiday Demand
The holiday shopping season looks to be off to a good start at Lululemon, which the company anticipating a solid holiday shopping season. In fact, no less than 17 different brokerages hiked price targets on Lululemon stock after it released quarterly earnings yesterday.
Leading the way on price target hikes was Stifel, who hiked its price target from $370 to $438.
Is Uber Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on LULU stock based on 11 Buys, seven Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 11.98% loss in its share price over the past year, the average LULU price target of $324.53 per share implies 20.47% downside risk.
