Companies and Brands
Why JPMorgan Favors Nike Over Lululemon Now
Published:
Last Updated:
After the markets have finally climbed to be positive for the year, investors are starting to breathe easier and are looking to put their cash back in the market. One key analyst has its eyes set on the apparel industry. with perhaps one of the world’s biggest brands at the forefront.
In a recent report, JPMorgan added athletic apparel and footwear giant Nike Inc. (NYSE: NKE) to its Analyst Focus list, saying concerns about inventory and gross margin issues are largely unwarranted. At the same time, JPMorgan removed Lululemon Atheletica Inc. (NASDAQ: LULU) from the Analyst Focus list.
Despite having a phenomenal year thus far, many analysts are predicting that Lululemon will take a backseat to Nike. Lululemon’s stock is up 19% year to date, but this run could be over in part due to concerns over profit margin contraction. Nike is on the other end of this, with the stock up only 1% year to date.
JPMorgan has an Overweight rating for Nike and raised its price target to $72 from $67. What makes this analyst call particularly interesting is that it is coming just before an earnings report. A couple other analysts weighed in at this time as well. B. Riley reiterated a Buy rating with a $73.50 price target, and Sterne Agee CRT reiterated a Buy rating with a $75 price target.
Overall things are looking up for Nike, but analysts took a slightly differnt perspective on Lululemon, despite its first quarter performance. MKM Partners reiterated a Buy rating with a $69 price target. Recently, Macquarie even reiterated a Sell rating with a $39 price target.
24/7 Wall St.Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
