Lululemon price target raised to $302 from $265 at BMO Capital

BMO Capital raised the firm’s price target on Lululemon (LULU) to $302 from $265 but keeps a Market Perform rating on the shares. The company reported a top-and-bottom line beat on flat U.S. sales and better gross margins on better product margin and flat markdowns, with guidance above the Street at the high-end after four quarters of guiding below, the analyst tells investors in a research note. BMO maintains its view however that Lululemon is a “strong but overstretched brand”, and while the positive will trigger “squeezes” from a generally skeptical investor base, it still has “long-term concerns” as the brand continues to work on “stretching further”.