Fox Business
Expand
Browse All Video
Watch Live

You're watching...

Double-Digit Growth Ahead for Lululemon?

Details

  • Description

    Morningstar Equity analyst Jamie Katz gives her outlook for Lululemon earnings.

  • Duration 3:10
  • Date

Clips

Also in this playlist...

Latest Video

Auto-advance: ON

Auto-advance
View All

Transcript

This transcript is automatically generated

Yeah -- lending famous for those high and yoga pants wink wink -- and -- got it reports first quarter earnings before the opening bell tomorrow cabinet post their -- Straight quarter of double digit growth for profit and revenue or.

Is the fat of those -- products done for good joining me now is Morningstar equity analyst.

Jaime -- -- welcome to you.

-- -- -- -- And I think.

At this point we really don't expect them to disappoint on earnings they're still a tremendous opportunity for growth from the company.

It's still very small still very Limbaugh and management team has done an excellent job.

And growing at at at a very methodical pace in making faces opening locations.

In in the appropriate demographics basis so.

I would expect that tomorrow we will either get I mean it or be it and they -- -- -- and raise earnings for the remainder of the year.

That said there -- -- mixed picture among your analyst community on the stock you've got a lot of upgrades and a lot of downgrades Jefferies for one cutting lululemon.

The price target down to 76 dollars -- 83 dollars we just saw the shares trading -- 171 dollars a how -- that translate into the trade what's your price target.

Our price target is actually much lower than that we have -- around 55 dollars a share and you know where where it's currently trading today -- roughly 72 dollars.

An attack is basically -- 45 times multiple on earnings for 2012.

And we think that may be that valuation has gotten a little bit ahead of where it should be.

At 55 dollars it's closer to 35 times earnings and what management has historically sat in.

You know has exceeded obviously is that they would like long term to be grown at a 25%.

Growth rate we understand that it is solid growth story.

But they are very conscious and their expansion policy and in.

I think that that it might be kind of what pulls it back in.

-- more conservative multiple on the -- right.

Jamie how optimistic are you on the growth strategy and how it's very against its competitors because in my own research seems like -- -- stock is taking -- as well you've got.

Under Armour.

In that space made -- a little bit more successful not to mention some of under farmers women's products athletic products are also taking hold in the market place.

So comments on the competitive space here.

And the challenges lululemon might be facing.

I think there there are a lot of players really -- during the spot right now in what the company has going for it is.

The technicals.

The sort of aspect of their here.

And you have different people coming in like -- -- -- -- that are really putting up a good fight it and that's something that's very disconcerting.

Until -- that the fan base and the following that Lou -- as is.

Something that you really don't -- and you our house and the other retailers but there are a lot of copycats and there there are that there are a lot of lower priced.

Competitors and -- you know if people do get more concerned about discretionary spending or consumer confidence that it obviously impact.

Top and bottom line Jaime -- of Morningstar thank you so much for joining us.

Reminds -- a one hit wonder -- does yoga pants and now that we'll see.

Load More