Lorraine Hutchinson, an analyst from Bank of America Securities, reiterated the Hold rating on Lululemon Athletica. The associated price target remains the same with $220.00.
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Lorraine Hutchinson has given his Hold rating due to a combination of factors tied to both solid execution and lingering risks. She notes that Lululemon’s holiday quarter is tracking toward the top end of sales and earnings guidance, with stable expectations for expenses, margins, and tax rate, which supports the current valuation. However, even with a somewhat lower-than-typical earnings multiple, she sees ongoing margin pressure and only modest upside, leading her to maintain a neutral stance.
Lorraine Hutchinson’s rating is based on the balance between areas of strength and operational headwinds. China delivered standout growth driven by strong marketing and customer engagement, and women’s, outerwear, and layering pieces performed well globally, with effective clearance helping manage inventory. At the same time, selling and marketing costs are elevated, particularly as marketing intensity rises and some spending is tied to clearing excess product rather than driving higher-quality growth. While the upcoming spring assortment and product innovation under the new creative leadership are promising, she appears to believe that these positives are already largely reflected in the stock, justifying a Hold rather than a more aggressive rating.
Hutchinson covers the Consumer Cyclical sector, focusing on stocks such as Nike, Lululemon Athletica, and Bath & Body Works. According to TipRanks, Hutchinson has an average return of 2.1% and a 52.90% success rate on recommended stocks.
In another report released today, Barclays also maintained a Hold rating on the stock with a $203.00 price target.