Will Lululemon Stock See Higher Levels Post Q1?

Key Highlights :

1. Lululemon is scheduled to report its fiscal first-quarter results on Thursday, June 1.

2. We expect LULU stock to likely trade higher due to revenues and earnings beating market expectations.

3. Lululemon's valuation is $390 per share, which is almost 15% higher than the current market price.

     Lululemon (NASDAQ: LULU), a company designing and selling athletic and casual apparel, is scheduled to report its fiscal first-quarter results on Thursday, June 1. With the company's strong performance in the fourth quarter of FY 2022, investors are expecting a positive outcome from the upcoming earnings report.

     The retail sector has been under pressure due to economic headwinds and inflation, but Lululemon has been able to produce strong quarterly earnings reports. Management now expects net revenue to be in the range of $9.30 billion to $9.41 billion, representing growth of approximately 15% year-over-year in FY 2023.

     Analysts are expecting Lululemon to post revenues of around $1.95 billion, slightly ahead of the consensus estimate. The company’s diluted earnings per share (EPS) in Q4 2022 was $0.94 compared to $3.36 in the fourth quarter of 2021. However, LULU’s EPS increased from an adjusted figure of $3.37 in Q4 2021 to $4.40 in Q4 2022, due to the inclusion of impairment of goodwill charges.

     Going by our Lululemon Valuation, with an EPS estimate of around 11.61 and a P/E multiple of 33.6x in fiscal 2023, this translates into a price of $390, which is almost 15% higher than the current market price. Investors should keep an eye on the company's results to see if the stock will be able to reach higher levels after the earnings report.

Continue Reading at Source : forbes