Lululemon Athletica (LULU – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Alexandra Straton from Morgan Stanley maintained a Buy rating on the stock and has a $373.00 price target.
Alexandra Straton’s rating is based on Lululemon Athletica’s potential for positive earnings per share (EPS) revisions in the near term, despite the company’s below-consensus sales and EPS guidance for 2025. Although the management cited challenges such as a cautious consumer environment, foreign exchange and tariff headwinds, and increased spending on marketing, brand-building, technology, and labor, Straton believes these factors set a low bar that Lululemon can surpass.
Additionally, Lululemon’s strong positioning in a volatile macroeconomic landscape supports the Buy rating. The company’s high operating margin, minimal discounting strategy, high average unit retail price, low exposure to the Chinese market, and a product assortment that is less dependent on seasonal and weather-related factors contribute to its resilience. These strengths, combined with the potential for EPS improvements, justify maintaining an Overweight rating on the stock.
Straton covers the Consumer Cyclical sector, focusing on stocks such as On Holding AG, Lululemon Athletica, and Ross Stores. According to TipRanks, Straton has an average return of 5.3% and a 58.28% success rate on recommended stocks.