Three Analyst Notes on Gap, Lululemon & Netflix Pre-Holiday

Dec 2, 2024 at 2:06 PM
During the holiday season on Wall Street, it's fascinating to see how analysts remain active, making calls right up to the year end. Here are some notable notes that grabbed my attention before 6 a.m. ET.

Uncover the Insights of Holiday Season Analysts

JP Morgan's Upgrade on Gap (GAP)

After a recent management meeting, JP Morgan's long-time retail analyst Matt Boss is giving a significant boost to his rating on Gap (GAP). He is upgrading it to overweight (buy equivalent), with the price target moving up from $28 to $30. As Boss stated, "With the foundation set under CEO Richard Dickson to support a consistent playbook of improved merchandising & marketing across all four brands, we see Gap at an inflection point to support low-to-mid-single-digit sales growth, annual operating margin expansion targeting historical levels of profitability." This provides valuable insight into the company's potential for growth during this holiday season. It shows that with the right leadership and strategies in place, Gap is poised for better performance.There is more to this than just increased shopping at Banana Republic Factory. The additional details from the Yahoo Finance's analyst recommendation tool shed more light on the analyst's vibe on Gap. This upgrade indicates a positive outlook for the company and could potentially attract more investors.

Citi's Neutral Rating on Lululemon (LULU)

Ahead of Lululemon's (LULU) earnings on December 5, Citi analyst Paul Lejuez is maintaining a neutral rating (hold equivalent) on the stock. However, it's his specific call on the stock that caught my attention. He mentioned that "Short interest currently sits at 6% of the float, above the 4% level three months ago and the highest short interest level in two years. Based on our conversations with investors, sentiment on Lulemon remains negative on the trajectory of Lululemon's US business, although most expect a sales/EPS beat in 3Q (driven by stronger international sales) and do not see another 2024 EPS guide down this quarter. Most bearish investors believe it will be difficult for Lululemon to grow EPS in 2025." This gives us an understanding of the current market sentiment and the challenges faced by Lululemon. It also highlights the importance of international sales in driving the company's performance.By looking at the short interest and other stats from the Yahoo Finance platform, we can gain a more comprehensive view of the stock's situation. This analysis helps investors make more informed decisions.

EvercoreISI's Hike on Netflix (NFLX)

Veteran tech analyst Mark Mahaney at EvercoreISI is raising his price target on Netflix (NFLX) from $775 per share to $950. Currently, Netflix stock trades at $886. Mahaney considers Netflix shares a "small buy" for him and reiterated an outperform rating. He explains, "At a high level, what our survey results and recent events (e.g. Q3 EPS and the massive success of the Tyson-Paul fight) suggest is that Netflix is in the strongest position financially, fundamentally and competitively that we have ever seen. Its overall streaming leadership – in terms of both market share and content quality – is commanding. And the clearly positive churn intent and price sensitivity results across all three of this quarter's surveys are material positives for a subscription business. We also see four notable near-term catalysts – Christmas Day NFL games, the 12/26 release of Squid Games II, WWE Raw in January, and pending price increases." This shows the positive trajectory of Netflix and the various factors contributing to its success. It provides investors with confidence in the company's future prospects.These analyses from different analysts during the holiday season offer valuable perspectives and information for investors looking to make informed decisions in the stock market.