Lululemon Has Room To Stretch Out

Yoga wear company Lululemon Athletica Inc.’s (LULU) share price is still ascending steeply and analysts are taking notice.

“We strongly believe this early stage ‘blue ocean company’ has the potential to become a global athletic apparel company,” analyst Barbara Gray of Blackmont Capital Inc., who rates the shares a buy with a target price of US$41.50, wrote in a note to clients. “We continue to recommend Lululemon as a long-term buy.”

Lululemon’s shares rose 12% in the past week thanks to the Fed cut and the appearance of CEO Robert Meers last week on the popular MSNBC show Mad Money, she noted.

Show host Jim Cramer has aggressively promoted the stock, believing it will follow the same upward sales trajectory as the high-growth sector players Under Armour (UA) and Crocs (CROX).

LULU 2-mo chart: