By Senad Karaahmetovic

Aneesha Sherman, Bernstein analyst, upgraded Lululemon shares (NASDAQ:) from Market Perform to Underperform using a $300.00 share price target.

Sherman began research coverage about LULU two months ago with an Underperform rating. The upgrade call is coming just weeks after Sherman launched his own research coverage.

“While we liked the growth story, we put the stock’s valuation at 30x NTM P/E, in line with other quality consumer names with mid-to-high teens EPS growth (e.g. Nike), versus a bullish 46x sell side average,” Sherman told clients in a note.

The analyst justified the upgrade move by saying “a lot has changed in two months,” namely the sector de-ration. Sherman wants a 16% increase in total revenues, which is higher than the guidance.

Bernstein remains bullish on consumer stocks despite the move lower as the sector can offer “high-teens earnings growth and high margins carrying 30+ NTM P/E multiples.”

Lulustock has increased 1% in preopening today