Lululemon Athletica Inc. (NASDAQ: LULU) was upgraded by Deutsche Bank as the Wall Street firm believed the apparel retailer has opportunity to expand in the international market.
According to CNBC, Deutsche Bank analysts Paul Trussell raised its rating for Lululemon to buy from hold. He also raised the target price of the stock to $89 from $72, representing 20 percent upside from Wednesday's close.
"Lululemon drives enormously strong customer loyalty, controls its distribution unlike other brands, leads the industry in full price selling, and is still in its infancy growing its International business," analyst Paul Trussell wrote in a note to clients Thursday, according to CNBC.
Lululemon’s shares rose 1 percent to $75.00 in the early trading in New York. The stock was up 15 percent year-to-date.
"LULU's international growth pillar continues to reflect one of the company's most significant opportunities," he wrote. "We think LULU will likely beat 4Q expectations on robust SSS [same store sales] and leverage of expenses."
Lululemon’s oversea sales are growing rapidly. Trussell said sales in Asian stores grew nearly 100 percent and sales in European stores grew 40 percent in the third quarter. The analysts also noted that stores outside North American only 17 percent of the company’s total stores.