Lululemon Analyst Says Mirror Acquisition Is A Win-Win - Lululemon Athletica (NASDAQ:LULU)

Lululemon’s (NASDAQ:LULU) acquisition of Mirror is mutually beneficial for both companies, according to Raymond James.

The Lulumeon Analyst: Matthew McClintock reiterated a Strong Buy rating on Lululemon.

The Lululemon Thesis: McClintock estimated that Mirror has the potential to reach $2.5 billion in revenue and contribute an additional 50 cents to Lululemon's EPS by 2023.

The analyst named the following as growth drivers:

Mirror’s partnership with Lululemon creates a potential distribution advantage over other fitness brands.
Mirror could reach over 2 million subscribers by 2023.
Mirror’s customer acquisition costs will be lower considering the traffic levels in Lululemon’s physical shops.
Mirror expands Lulu’s reach to a larger digital platform that has been intensified by the pandemic and the need for an at-home fitness device market.

To that end, “Mirror is perfectly positioned to capture more than its fair share,” McClintock said.

LULU Price Action: Lululemon shares ended Wednesday's session 2.97% higher at $345.33.

Public domain photo via Wikimedia.

LULULululemon Athletica Inc

$126.74-0.35%

Overview

Market News and Data brought to you by Benzinga APIs

To add Benzinga News as your preferred source on Google, click here.