Luxury yoga-wear manufacturer Lululemon, soaring on a blowout quarter, garnered a “neutral” rating from one analyst and an “outperform” from another on CNBC Thursday. Why the difference?
“This is a great company. We love the management, we love the marketing strategy, but I think there’s a price for everything,” said Laura Champine, senior retail analyst at Cowen, who gave it a neutral rating.
“With the stock’s move today, it will be trading closer to 40 times earnings next year, 20 times EBITTDA. That’s priced for perfection. I don’t think there’s any room for error at this price point.”
'Investors Will Pay for Scarcity'
But Erika Maschmeyer, senior retail analyst at Robert W. Baird, sees a stock with more traction and she gave it an “outperform.”
“This can be an earnings-growth story from here,” added Maschmeyer.
“Investors will pay for scarcity. There aren’t that many retailers out there with the possibility to double their store base in the US, grow their e-commerce base at a good clip and expand internationally.” ______________________________
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Other Athletic Apparel Makers:
Under Armour
Nike
Columbia Sportswear
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Disclosures:
Neither Champine nor Maschmeyer hold significant amounts of Lululemon shares.