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6 analyst picks: Lululemon sparkles | Pro Recap

By Davit Kirakosyan -- Here is your daily Pro Recap of the biggest analyst picks you may have missed since yesterday.

Lululemon gets Buy call at Citi

Citi upgraded Lululemon Athletica (NASDAQ:LULU) to Buy from Neutral this morning with a price target of $440.00, up from $350.00, after yesterday's better-than-expected earnings report.

The firm said the Buy rating is based on a few factors, including a better-than-expected inventory-to-sales gap "and pathway to further improvement (with limited markdown pressure)," as well as "no signs of a sales slowdown with 1Q trends starting stronger than expected, underscoring LULU’s brand strength/momentum in its largest market."

The firm furthermore cited promising China positioning and the stock's cheap price vs. that of Nike (NYSE:NKE). It is also modeling at least 20% earnings-per-share growth annually at the company through fiscal 2027.

Shares were leaping 15% in the premarket.

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Occidental Petroleum upgraded to Outperform, Buffett buys more shares

TD Cowen upgraded Occidental Petroleum (NYSE:OXY) to Outperform from Market Perform and raised its price target to $70.00 from $63.00 as it sees a superior risk-reward balance of superior exposure to crude pricing, capital structure shifts, captive buying support from Berkshire Hathaway (NYSE:BRKa), a favorable free cash yield, well productivity and a differentiated catalyst rich profile in a world of relative homogeneity across E&Ps.

The upgrade comes while Warren Buffett’s Berkshire Hathaway continues to increase its stake in the oil company, purchasing an additional 3.7 million shares. Berkshire Hathaway's stake is now 23.6%.

Shares closed more than 4% higher yesterday.

Ciena upgraded on expected new market entry

Raymond James upgraded Ciena (NYSE:CIEN) to Strong Buy from Outperform and raised its price target to $70.00 from $58.00, noting it believes the company’s entry into the edge router market, which is expected to hit $8 billion this year, will be a catalyst for shares to re-rate higher.

“We believe the platform allows Ciena to address SP edge router use-cases and will feature subscriber management features for enterprise, consumer, and mobile network support. The platform converges optical and routing capabilities… Ciena has no share, so routing is all upside,” said the firm.

Shares gained more than 4% yesterday.

Coherus Biosciences upgraded to buy, shares surge

UBS upgraded Coherus BioSciences (NASDAQ:CHRS) to Buy from Neutral with a price target of $11.00 as it believes the recent sell-off presents an attractive entry point, while the topline growth narrative appears underappreciated at the current valuation.

“Through its multiple biosimilar launches, Coherus has multiple shots on goal; we believe biosimilar revenue can climb to $580m by '25E (from $211m in '22A),” said the firm.

Shares surged 7% yesterday and are currently trading more than 4% higher in premarket.

2 more picks

Oppenheimer initiated coverage on Carrier Global (NYSE:CARR) with an Outperform rating and a price target of $51.00.

The firm views portfolio management opportunities as re-rating catalysts, and believes demonstrated ability to deliver above-average incrementals and improving FCF conversion can support a narrowing of the company’s valuation discount to peers.

RBC Capital upgraded Elevance Health (NYSE:ELV) to Outperform from Sector Perform and raised its price target to $572.00 from $523.00, coming away from 2023 Investor Day with a greater appreciation for the momentum building in Carelon, specifically in value-based arrangements, which will drive company earnings growth through 2027.

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