Analyst Paul Lejuez of Citi maintained a Hold rating on Lululemon Athletica, reducing the price target to $220.00.
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Paul Lejuez has given his Hold rating due to a combination of factors affecting Lululemon Athletica’s financial outlook. The company is expected to slightly exceed earnings expectations for the second quarter, but ongoing challenges in the Americas market, including weak traffic and category trends, are leading to increased markdowns. Additionally, the growth outlook in China remains uncertain, with management likely to maintain ambitious growth targets despite recent slowdowns.
Moreover, the impact of higher tariffs is anticipated to create a headwind for the company’s earnings, prompting a reduction in fiscal 2025 earnings per share guidance. While sales guidance is expected to remain steady, the overall sentiment around Lululemon’s sales and earnings trajectory is cautious. The stock’s current valuation suggests a balanced risk/reward scenario, justifying the Hold rating as the company navigates these challenges.
In another report released yesterday, Morgan Stanley also maintained a Hold rating on the stock with a $223.00 price target.
Based on the recent corporate insider activity of 31 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of LULU in relation to earlier this year.