Analysts weigh in on Lululemon

Retail analysts weigh in on Lululemon (NASDAQ:LULU) following co-founder Chip Wilson's decision to sell half his stake to Advent International.

Deutsche Bank sees a positive benefit as Advent grabs two board seats and some obstacles are removed from the proxy road.

Jefferies notes the stock sale doesn't change the fundamental risk to margin compression that exists at Lululemon.

Belus Capital Advisors thinks Lululemon still faces a major challenge with the growing encroachment of Under Armour into its key categories.

LULU +3.8% premarket.

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Comments (2)
  • Stan Ackman
    , contributor
    Comments (1933) | Send Message
    I don't know too much about Advent's track record, so it is hard to gauge how much positive impact can derive from the two new board members.


    The negative is the diminished possibility of a buyout or merger in the next 1.5 years. The agreement rules out hostile takeover, so the management and board have less pressure to resist a buyout. Given the involvement of Advent and Chip, a merger with a potential suitor such as VF or Nike is unlikely.
    8 Aug 2014, 09:23 AM Reply Like
  • markb
    , contributor
    Comments (584) | Send Message
    The analysts look at LULU from 100,000 feet.


    Advent, arguably the most informed PE firm in this case, has turned over every rock and has determined $42.04 meets their aggressive return requirements.


    I'm with Advent.
    8 Aug 2014, 09:45 AM Reply Like
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