Lulu's Fashion Lounge slides as BofA downgrades on near-term pressure
10/06/2022 16:35
** BofA Global Research downgrades Lulu's Fashion Lounge
LVLU.O to "neutral" from "buy", citing near-term headwinds and
valuation
** Shares of the women's fashion brand down ~11% at $15.72;
broader retail industry also down on hotter-than-expected
inflation data for May urn:newsml:reuters.com:*:nL4N2XX2MG urn:newsml:reuters.com:*:nL1N2XW25Z
** BofA says surge in LVLU shares price in long-term growth
potential; stock has more than tripled since hitting a record
low in March 2022
** BofA analyst Lorraine Hutchinson expects macroeconomic
weakening to hurt near-term growth for LVLU
** Says H2 faces risk of demand slowdown combined with
higher promotions across the industry as many retailers try to
clear excess inventories
** Still, BofA views LVLU as a "highly profitable" digital
retailer; lifts price objective to $21 from $14 to reflect a
slight premium to peer Revolve Group RVLV.N
** Six of seven brokerages rate LVLU "buy" or higher and one
"hold"; their median PT is $18 - Refinitiv
** With session's moves, stock up ~53% YTD, while RVLV has
fallen ~46%
(Reporting by Deborah Sophia in Bengaluru)
((DeborahMary.Sophia@thomsonreuters.com;))