Jul. 8 at 8:51 PM
$LULU
lululemon athletica is upgraded to Strong Buy as valuation now reflects a compelling discount to its turnaround potential.
Despite ongoing North American weakness and cautious guidance, LULU's debt-free balance sheet and robust buybacks (potential ~8.76% yield expected) provide strong downside protection.
International growth pillars remain very solid, with China and global markets growing 23% and 9% YoY, offsetting US softness.
Intrinsic value is estimated well above current levels even when using conservative assumptions, highlighting a significant upside from current levels despite near-term macro headwinds.