Lululemon Athletica's (NASDAQ:LULU) price target was raised to $450 from $445 at Piper Sandler on Monday, with analysts reiterating an Overweight rating on the stock.
The analysts told investors in a note that the athletic apparel company has "quality earnings growth ahead."
"We reiterate our OW rating on LULU as we increase our PT and estimates based on an analysis of the revenue opportunity in China," they wrote. "Approximately 2/3 of the current store base in China was opened since the start of the COVID-19 pandemic, which has caused severe disruption including lengthy store closures. We estimate that store productivity in the region will improve by ~35% in FY23 (improved an estimated 30% in 1Q), which, in addition to new store openings, should almost double company-owned store revenue in the region this year."
"With an almost fully DTC business, we believe LULU is also better positioned than peers in North America in the near term as the domestic wholesale environment continues to be challenging," the analysts added.
They also noted that LULU continues to see strong guest metrics, including consistent cohort behavior, while the firm's updated promo tracker supports strong full-price selling.