Alexandra Straton, an analyst from Morgan Stanley, maintained the Hold rating on Lululemon Athletica. The associated price target was lowered to $223.00.
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Alexandra Straton’s rating is based on several factors impacting Lululemon Athletica’s stock performance. Firstly, there is a lack of confidence in a positive sales turnaround in the Americas, which is a significant market for the company. Additionally, while the company might achieve better-than-expected profitability, it is unlikely to be sufficient to drive a positive re-rating of the stock. The current forward price-to-earnings multiple is seen as fair, given the company’s growth and margin profile, but not enough to warrant a higher rating.
Looking ahead to the second quarter of 2025, Straton anticipates potential underperformance in earnings per share and a stagnant or worsening sales trend in the Americas. Management might also lower their full-year earnings guidance. Although the stock’s valuation appears low, and there is a potential for a positive shift in the Americas’ performance, a significant re-rating seems unlikely. Consequently, Straton maintains a Hold rating with a price target of $223.
Straton covers the Consumer Cyclical sector, focusing on stocks such as On Holding AG, Lululemon Athletica, and Tapestry. According to TipRanks, Straton has an average return of 5.0% and a 54.69% success rate on recommended stocks.
In another report released on August 19, Wells Fargo also maintained a Hold rating on the stock with a $205.00 price target.