Gold prices steady, holding sharp gains in wake of soft U.S. jobs data
On Friday, KeyBanc Capital Markets adjusted its price target for Lululemon Athletica Inc. (NASDAQ:LULU) shares, reducing it from $420.00 to $400.00, while sustaining an Overweight rating on the stock. According to InvestingPro analysis, LULU is currently trading below its Fair Value, suggesting potential upside opportunity. The adjustment follows Lululemon’s announcement of fourth-quarter results that surpassed expectations and provided an outlook for fiscal year 2025, suggesting improvements in the U.S. market alongside continued international growth.
Lululemon reported a 13% year-over-year increase in revenue, with strong performance throughout the holiday season. The company achieved diluted earnings per share (EPS) of $6.14, credited to margin enhancements and ongoing careful expense management. InvestingPro data reveals impressive gross profit margins of 58.85% and a healthy return on equity of 46%. A noteworthy uptick in U.S. sales growth to 5% was attributed to the brand’s return to its usual pace of product innovation, with promising early feedback on new offerings such as GlowUp and Daydrift.
Despite the reduction in the price target, KeyBanc analysts expressed continued confidence in Lululemon’s management team and their capacity to implement strategic initiatives. These efforts are expected to drive further growth in revenue and profits, building on the company’s strong 10.84% revenue growth over the last twelve months. The Overweight rating indicates that KeyBanc believes the company’s stock will outperform the average return of the stocks the firm covers over the next 12 to 18 months. For deeper insights into LULU’s financial health and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports.
The report highlighted Lululemon’s strong fourth-quarter performance, which included better-than-anticipated financial results and a positive outlook for the coming fiscal year. The company’s guidance for FY25 implies that it is poised for improvement in the U.S. market, building on its ongoing international strength.
KeyBanc’s analysis suggests that while the price target has been slightly lowered to reflect the guidance and after-hours share price movement, the firm’s analysts remain optimistic about Lululemon’s potential. The company’s strategic initiatives and product innovations are expected to contribute to its growth trajectory, supporting KeyBanc’s positive stance on the stock.
In other recent news, Lululemon Athletica Inc. reported fourth-quarter earnings that surpassed analyst expectations, with revenues of $3.61 billion and earnings per share (EPS) of $6.14, exceeding Stifel’s projections of $3.58 billion in revenue and $5.85 EPS. Despite this strong performance, Lululemon’s fiscal year 2025 guidance has been conservative, projecting revenues between $11.15 billion and $11.30 billion and adjusted EPS ranging from $14.95 to $15.15. This cautious outlook led several analysts to adjust their price targets for the company. Stifel maintained a Buy rating but reduced its price target to $424, while UBS lowered its target to $335, maintaining a Neutral rating. Needham also cut its price target to $366 but kept a Buy rating, citing Lululemon’s strong financial position and potential for growth. JPMorgan reduced its price target to $391 while maintaining an Overweight rating, noting the company’s impressive revenue growth and margin expansion. Analysts have expressed varying levels of optimism about Lululemon’s growth prospects, with some highlighting concerns about the company’s ability to achieve significant acceleration in its growth rate.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.