Lululemon Shares Falling; This Firm Says Buy Ahead Of Earnings

Ahead of Thursday's earnings report, analysts at Cowen and Company are recommending investors to buy Lululemon Athletica inc. (NASDAQ: LULU). Cowen analysts point to the potential for comps to show "solid" growth prospects as the catalyst for the stock to move higher despite trading at a "premium."

In addition to the traditional retail metrics of earnings and same-store sales, Cowen will also be interested in the performance of Lululemon flagship stores that will not be factored into the year-over-year comp. Finally, Cowen expects Lululemon to expand to two new categories, one of which is the kitchen.

Cowen analysts said they understand the "intense competition in the athletic apparel space," but expect Lululemon will deliver on improved products, controlled markdowns and e-commerce gains.

Shares of Lululemon recently traded at $64, down more than 2.5 percent in the premarket.