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Investing.com - Evercore ISI has reduced its price target on Lululemon Athletica Inc. (NASDAQ:LULU) to $265.00 from $320.00 while maintaining an Outperform rating on the athletic apparel retailer. The stock, currently trading at $224.03, is showing oversold conditions according to InvestingPro technical indicators, having declined 44% over the past six months.
The firm has also removed Lululemon from its Top 5 Outperform list, replacing it with Ulta Beauty (NASDAQ:ULTA). The revised price target represents an 18% upside from current levels and is based on a 17x multiple of Evercore’s 2026 earnings estimate, down from the previous 19x multiple. Currently trading at a P/E ratio of 15.18x, InvestingPro analysis suggests the stock is undervalued relative to its Fair Value.
Evercore lowered its second-quarter earnings per share forecast to $2.95 from $3.00, still above the Street consensus of $2.88. The firm now projects global same-store sales growth of 3.3% excluding foreign exchange effects, down from its previous estimate of 3.7%.
For fiscal year 2025, Evercore reduced its earnings per share estimate to $14.50 from $14.90, based on same-store sales growth of 3%, down from the previous 4% projection. The firm expects gross margins to decline 130 basis points year-over-year to 57.9%.
Evercore also cut its fiscal year 2026 earnings per share estimate to $15.85 from $16.70, compared to the Street consensus of $15.58, citing ongoing concerns about the company’s growth trajectory.
In other recent news, Lululemon Athletica Inc. has announced the opening of its first Italian store in Milan’s central shopping district, scheduled for July 19, 2025. The store will span approximately 5,700 square feet and offer a variety of men’s and women’s collections. Meanwhile, Stifel has reiterated its Buy rating for Lululemon, citing the company’s innovation cycle as a driver for potential growth in the U.S. women’s business. TD Cowen also maintained its Buy rating, despite noting challenges such as negative U.S. traffic trends and rising tariffs in Vietnam.
In legal matters, Lululemon has filed a lawsuit against Costco (NASDAQ:COST), accusing the retailer of selling knockoff versions of its popular products under the Kirkland brand. The lawsuit alleges that these "dupes" could confuse consumers and harm Lululemon’s reputation. Additionally, the company is undergoing a reorganization that involves cutting approximately 150 corporate jobs, primarily affecting store support centers. These developments reflect a period of strategic adjustments and legal actions for the athletic apparel retailer.
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