BMO Capital analyst Simeon Siegel maintained a Hold rating on Lululemon Athletica (LULU – Research Report) yesterday and set a price target of $302.00.
Simeon Siegel has given his Hold rating due to a combination of factors surrounding Lululemon Athletica’s recent financial performance and future guidance. The company reported better-than-expected results for the fourth quarter, with strong sales and improved gross margins driven by better product margins and reduced markdowns. However, the guidance for the first quarter and fiscal year 2025 indicates challenges, with earnings per share expected to fall below expectations, despite revenue projections aligning with the higher end of estimates.
Siegel is cautious about the long-term growth prospects, particularly in the domestic and women’s segments, as the brand continues to expand. While Lululemon remains a strong brand with significant growth potential, there are concerns about the sustainability of its current margin levels, which may have reached a peak. Additionally, the company’s strategic investments and marketing expenses are expected to increase, potentially impacting profitability. These factors contribute to the Hold rating, suggesting a balanced view between potential growth and existing risks.
In another report released today, Piper Sandler also maintained a Hold rating on the stock with a $315.00 price target.
LULU’s price has also changed moderately for the past six months – from $280.010 to $341.530, which is a 21.97% increase.