William Blair analyst Sharon Zackfia has maintained their neutral stance on LULU stock, giving a Hold rating on December 12.
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Sharon Zackfia’s rating is based on several factors impacting Lululemon Athletica’s financial outlook. The company is expected to face margin pressures due to tariffs and the end of the de minimis exemption, alongside normalized stock-based compensation and potential higher labor costs in U.S. stores if sales improve. As a result, the projected earnings per share for 2026 have been revised downwards, reflecting a contraction in operating margins.
Additionally, despite a recent increase in share price following the third-quarter results and the CEO’s departure, there are uncertainties surrounding the company’s leadership change and the timing of a U.S. sales recovery. The analyst maintains a Hold rating due to these uncertainties, the lack of immediate catalysts, and the competitive nature of the industry, which could impact Lululemon’s brand strength and margin recovery efforts.
Zackfia covers the Consumer Cyclical sector, focusing on stocks such as Planet Fitness, CarMax, and Carnival. According to TipRanks, Zackfia has an average return of 6.4% and a 47.28% success rate on recommended stocks.
In another report released on December 12, Barclays also maintained a Hold rating on the stock with a $189.00 price target.