Harriet Lefton

About the Author Harriet Lefton

Harriet originates from the UK where she worked as a journalist specializing in the metal markets. She graduated from the University of Cambridge before becoming a qualified UK lawyer.

Thursday’s Market Insights: Lululemon Athletica inc. (LULU), Gevo, Inc. (GEVO) and Prana Biotechnology Limited (ADR) (PRAN)


Lululemon Athletica inc. (NASDAQ:LULU) shares are sinking in trading today by -24% following the release of disappointing forecasts for 2017. The sports apparel marker announced that the first quarter had made a slow start with a collapse in online sales and store traffic following a strong holiday season at the end of last year. The company is also facing tough competition from companies like Under Armor and Nike. As a result, FY17 same-store-sales guidance for positive low-single digits and a Q1 low-single digit decline came in well-below expectations.

For the first quarter of fiscal 2017, LULU now expects net revenue to be in the range of $510 million to $515 million with net revenue for the full fiscal year in the range of $2.55 billion to $2.6 billion. CEO Laurence Potdevin said: “Although we’ve had a slow start to 2017, our teams are passionately committed to delivering on our robust plans across product innovation, digital, North America and international as we realize our ambitious vision for the future.”

A flurry of analysts published ratings on the stock following the news, which included three stock downgrades from Citigroup, Wells Fargo and Merrill Lynch. In particular, 3-star Wells Fargo analyst Ike Boruchow commented that the Q4 results “uncovered several issues that are likely to create an overhang on the stock for the foreseeable future.” However in the long term analysts were more positive on the stock’s outlook with Citigroup’s Paul Lejeuz admitting that while the path may be obscured at present, ultimately there is still “significant room to grow the brand.”

The stock has a moderate buy analyst consensus rating on financial accountability engine TipRanks with 9 buy, 9 hold and 3 sell ratings published on the stock in the last three months. With an average analyst 12-month price target of $66, serious upside potential of 27% is predicted for the stock from its current price of $52.

Gevo, Inc. (NASDAQ:GEVO) shares are falling by -11% in today’s trading after the company released its 4Q16 results. The renewable chemicals and advanced biofuels company saw Q4 EPS loss of $0.33 on revenue of $5.8 million down from $7.3 million in the same period in 2015.

Gevo also announced operational targets for this year that include restructuring the balance sheet to address its $17 million of debt, and to achieve a cash EBITDA loss of between $18.0-$20.0 million for the fiscal year ending December 31, 2017. Gevo also expects to produce approximately 500,000 gallons of isobutanol during 2017 to match market development sales, although its maximum capacity could be over 1 million gallons/ year.

CEO Dr Gruber spoke of the company’s plans to obtain binding supply contracts: “In 2017, our core goals relate to market development with a focus of securing supply agreements from customers to off-take isobutanol, ATJ and isooctane from our expanded plant in Luverne. We can see the customer interest, and we need to translate that interest into binding agreements to build a profitable business.”

Prana Biotechnology Limited (ADR) (NASDAQ:PRAN) shares are rising by 48% in Thursday’s trading on the announcement that PRAN will give a presentation demonstrating pre-clinical evidence for its Parkinsonian movement disorders at the 13th International Conference for Alzheimer’s and Parkinson’s Diseases which is happening now in Vienna.

The presentation is on Prana’s PBT434, which Prana Biotech sees as a first-in-class disease modifying therapy. The poster for the presentation, which will be given by Associate Professor David Finkelstein, shows that the presentation is called, ‘PBT434 prevents neuronal loss, motor function and cognitive impairment in preclinical models of movement disorders by modulation of intracellular iron’.

The poster presents evidence of the ability of PBT434 to prevent the loss of neurons that underpin motor and cognitive dysfunction by preventing metal mediated degenerative processes that lead to neuronal death. In particular, PBT434 reduced alpha-synuclein in the cerebrospinal fluid, which is present in the brain and spine PBT434 for in vivo target engagement. The results suggest that PBT434 could be a novel disease modifying agent. Pre-clinical studies also suggest that PBT434 has a strong toxicology profile and a favorable therapeutic margin which is the difference between the optimal effective dose and the dose at which unacceptable adverse effects occur.

 

 

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