(Bloomberg) -- Wall Street analysts are boosting price targets for Lululemon Athletica Inc. before the company reports earnings Thursday, predicting that brand loyalty for the maker of pricey yoga and exercise apparel will help the stock build on a two-month rally that’s erased most of its 2022 losses.

At Cowen, John Kernan lifted his call on Lululemon to $542 per share on Monday from $535, further separating himself from all other analysts covering the stock. His projection would mean a 42% increase over the next 12 months from Monday’s closing price of $381.13.

Analysts are betting that Lululemon will extend its eight-quarter streak of double-digit sales growth, even as consumers cut back on apparel spending with soaring inflation hitting their pocketbooks. On average, the Street predicts a 25% year-over-year jump in third-quarter net sales, according to Bloomberg consensus, as Lululemon’s products remain in high demand.

Kernan expects further sales momentum to be buoyed by expanded offerings in categories like running and hiking, according to a research note. He pointed to a Cowen survey showing a “high degree of loyalty” from Lululemon’s “healthy, high-end” customer base. The analyst rates the stock outperform and sees potential for management to boost its fiscal 2023 revenue forecast for the third time since June.

The growing enthusiasm comes as the stock has climbed 36% since Sept. 30. It dipped Monday after advancing the past nine sessions, the longest winning streak since 2020. The shares are now down about 2.6% for the year, far outperforming the 30% decline in the Russell 1000 Index Consumer Discretionary index. 

Meanwhile, Credit Suisse’s Michael Binetti boosted his target to $465 from $390; Citigroup Inc.’s Paul Lejuez raised his to $400 from $350; and Jim Duffy at Stifel lifted his to $450 from $400. 

The lowest target for Lululemon on Wall Street is $200 from Randal Konik at Jefferies, who rates the stock underperform. He’s been negative on the shares since his downgrade from hold on July 11, and he says the company’s third-quarter performance will likely be “the peak.”

Lululemon executives’ early thoughts on next fiscal year will be in focus on Thursday, said Citigroup’s Lejuez. 

“If management talks about incremental cost headwinds/investments next year, that could be a negative to shares,” he wrote. Business is strong, though “expectations are high heading into the print, making for a tough setup,” according to Lejuez, who rates the stock neutral.

Lululemon has 22 buy-equivalent ratings, nine holds, and two sells, with an average 12-month target price of about $379, according to data compiled by Bloomberg. 

(Updates share performance to reflect Monday’s closing price)

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