Under Armour, Inc. (U9R.DE)

Athleisure Boom: Analysts bullish on Lululemon, cautious on Nike

Athleisure is becoming the next big trend, with over 200 new brands entering the market since the COVID-19 pandemic. CFRA Research Analyst Zachary Warring and Head of the William Blair Equity Research Group Consumer Sector Sharon Zackfia join Yahoo Finance Live to discuss their perspectives on stocks within the booming industry. Warring names Lululemon (LULU) a buy in athleisure, noting that the brand grew 70% in the Chinese market, while Nike (NKE) only grew 6% in the same market. Warring upgrades Lululemon to a Strong Buy rating, explaining that the current stock pressure is an opportunity given Lululemon's continued strong margins. Regarding Nike, Warring expresses skepticism, stating that it is challenging to see where the company can find "its next level of growth." Although Nike is a worldwide brand, he believes its market is saturated and international markets are growing weaker. Zackfia supports Warring's positive outlook on Lululemon, stating that the brand's US sales were "very healthy" despite some pressure, and the macro headwinds are "things they can fix." Additionally, Zackfia names Under Armour (UA, UAA) as another Buy recommendation, highlighting the brand's leadership transition, which she believes will enable the company to "harvest more margin." For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Angel Smith