Analyst Lorraine Hutchinson of Bank of America Securities reiterated a Buy rating on Lululemon Athletica (LULU – Research Report), reducing the price target to $400.00.
Lorraine Hutchinson’s rating is based on a combination of factors including Lululemon Athletica’s strong customer response to new product launches, which instills confidence in the company’s ability to enhance North American sales growth once store traffic stabilizes. Despite a slight reduction in earnings estimates due to margin pressures from tariffs, foreign exchange, and increased expenses, the company has provided a robust earnings guidance for FY25, suggesting a positive outlook.
Lululemon’s innovative product lines, such as the Daydrift trousers and other new offerings, have been well-received, indicating potential for sales growth. Although the company faces challenges such as reduced margins and a cautious outlook for U.S. trends, the potential for improved consumer conditions could lead to sales upside. This combination of strong product reception and strategic guidance supports Hutchinson’s Buy rating for Lululemon’s stock.
In another report released today, Needham also maintained a Buy rating on the stock with a $366.00 price target.