Sometimes, the key to believing in a company is being passionate about its product. So when that company proves it's not simply creating good merchandise, but it is also listening to customer feedback, it can be enough to boost Wall Street's conviction in its stock.
In a research report that doubled as a "personal fashion note," Citi analyst Paul Lejuez on Friday lifted his target price for buy-rated Lululemon, to $89 from $78. Lejuez cited his increasing confidence in the brand's ability to successfully execute on its growth initiatives, which include cultivating its men's business.
Lululemon shares are up close to 48 percent this year and were slightly higher, closing at $77.65 on Friday.
"I'll just admit it, Lulu's Commission and ABC pants are the most comfortable pants I own," Lejuez wrote. "Even better, they look like chinos/khakis, so I could wear them to work, except for one thing ... there is a black logo on the side of the knee."
In a sign that the brand is listening to male feedback, Lululemon earlier this year tweaked the logo on these pants to be beige, so that it doesn't stand out, Lejuez said. And at checkout, the company started putting men's purchases into black bags, as opposed to the easily identifiable red ones they give women.
For Lejuez, these seemingly simple changes show the brand is "serious about connecting with a male customer."
"If they got rid of the logo on men's pants, I think it could open up a whole new market," he wrote.