Fannie Mae, Freddie Mac shares tumble after conservatorship comments
On Friday, KeyBanc analysts adjusted their outlook for Lululemon Athletica Inc. (NASDAQ:LULU) by lowering the price target to $350 from $400, while maintaining an Overweight rating. The adjustment follows Lululemon’s first-quarter results, which slightly surpassed expectations. According to InvestingPro data, the company currently trades at a P/E ratio of 22.6x, with analysis suggesting the stock may be slightly undervalued.
Lululemon reported a 7% year-over-year increase in revenue, with growth observed across all regions. The company’s diluted earnings per share (EPS) reached $2.60, supported by impressive gross margins of 59.2% and strong top-line momentum. Despite the positive revenue growth and a robust financial health score rated as "GREAT" by InvestingPro, the full-year 2025 EPS guidance was lowered.
The analysts noted that new product offerings are showing potential to become core franchises, and the company is returning to historical levels of product innovation. They expressed confidence in Lululemon’s ability to maintain its premium positioning by selectively raising prices and mitigating tariff impacts.
KeyBanc remains optimistic about Lululemon’s strategic initiatives, which aim to drive growth towards its Power of Three x2 goals. The analysts reiterated their Overweight rating, reflecting their belief in the company’s resilience in the current macroeconomic environment.
In other recent news, Lululemon Athletica Inc. reported mixed first-quarter results, with a modest 3% revenue growth in the Americas and a 2% year-over-year decline in comparable sales. Analysts from Jefferies, Piper Sandler, and Goldman Sachs have all lowered their price targets for the company, citing various concerns. Jefferies reduced its target to $200, highlighting weak U.S. trends and rising inventory levels as challenges. Piper Sandler adjusted its target to $270 due to tariff impacts and consumer caution, while Goldman Sachs set it at $285, noting weaker trends in China and other regions.
Despite these challenges, Lululemon maintained its annual sales guidance, with second-quarter sales expected to align with consensus estimates. However, the company reduced its EPS forecast, anticipating higher markdowns throughout the year. Analysts have expressed concerns about Lululemon’s strategy to mitigate tariffs through modest price increases on certain products. The company’s fiscal outlook is considered de-risked regarding tariffs and promotions, yet questions remain about its ability to maintain growth amid competitive pressures.
Piper Sandler previously raised its price target to $315 ahead of the earnings report, anticipating that Lululemon would exceed buy-side expectations. The analysts highlighted strong performance from new product lines and stable U.S. trends as positive indicators. Meanwhile, Raymond (NSE:RYMD) James maintained a Market Perform rating, expressing caution due to macroeconomic uncertainties and tariff pressures. As Lululemon prepares to announce its first-quarter earnings for fiscal year 2025, investors are closely watching these developments.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.