The stock of Canada’s Lululemon Athletica (LULU) rose as much as 7% after it was disclosed that the retailer’s interim CEO has been buying company stock.
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Lululemon interim Co-CEO Andre Maestrini recently purchase 3,275 shares of LULU stock on April 1 at an average price of $151.02. In all, Maestrini bought $494,590 worth of Lululemon stock, increasing his total stake in the company to 34,551 shares worth $5.22 million.
Many investors interpret stock purchases by company executives as a sign of confidence and that the shares might be undervalued at current levels. In Lululemon’s case, the stock purchases by the interim CEO come with the share price down 42% over the past 12 months.
Lululemon’s Turnaround
Maestrini is serving as interim co-leader of Lululemon after previous CEO Calvin McDonald announced last December that he was stepping down as the clothing retailer faces a number of issues. Lululemon has struggled with poorly received products and slumping sales, notably in the Chinese market.
The athletic apparel maker is also involved in a protracted and very public dispute with company co-founder Chip Wilson, who is calling for an overhaul of Lululemon’s board of directors. And, the company has been targeted by activist investor Elliott Management, which is pushing for changes.
Is LULU Stock a Buy?
Lululemon Athletica’s stock has a consensus Hold rating among 21 Wall Street analysts. That rating is based on one Buy and 20 Hold recommendations issued in the last three months. The average LULU price target of $182.41 implies 19% upside from current levels.
