Shares Lululemon Athletica (NASDAQ:), were up nearly 2% pre-open Tuesday, after Truist Securities analyst Beth Reed elevated to Buy From Hold.

The price target of LULU stock now stands at $495.00 per Share, an increase from the $390.00.

Lulu is expected to announce a 5-year financial outlook during the April 20th analyst conference.

“We see the company likely providing a similar outlook as in 2019, including a low-teens revenue CAGR, modest EBIT margin expansion and a mid-teens EPS CAGR. We see this scenario as resulting in ~$17 in EPS by 2026 and a $595 stock at the current multiple (~55% upside) or a $765 stock at our target multiple (~100% upside),” Reed said in a client note.

According to Reed, LULU’s momentum is driven by (1) consumer prioritization of health & wellness, (2) a growing TAM, (3) improved store traffic/inventory levels and (4) modest go-forward EBIT margin expansion.

The analyst sees LULU as able pass on inflation in product costs.

Net-net, Reed sees current levels “as an attractive entry point for what we view as a quality long-term growth story.”

By Senad Karaahmetovic