By Senad Karaahmetovic

Kimberly Greenberger, Morgan Stanley analyst, upgraded Lululemon Athletica (NASDAQ) to Overweight or Equal Weight, with a target price of $303.00 per share. This is a drop from $339.00

An analyst claims that LULU shares are being traded at a discount because of fears about recession and downbeat consumer mood.

“Current levels offer an attractive entry point, so we move off the sidelines & recommend long-term oriented investors take another look at this quality asset on sale,” Greenberger told clients in a note.

Risks are priced in, Greenberger added, and the risk is now to the upside as Lululemon’s business could be more resilient through industry/macro headwinds than the market currently discounts.

“LULU could weather industry/macro headwinds more effectively than Softlines peers & what the market is currently discounting.”

Jay Sole, UBS analyst sees a balance upside/downside skew going into the print for LULU.

“We forecast LULU delivering 1Q22 EPS and FY22 guidance in-line with sell-side consensus EPS estimates. We don’t believe the sell-side EPS estimates will change significantly because of this. We also believe the market expects this type of report, so we doubt the stock’s P/E moves much over the event,” Sole told clients in a note.

The UBS analyst expects a “low volatility” event.

Today, Lululemon stocks are almost up 8%