Lululemon stock price target lowered to $185 by BofA Securities

Investing.com - BofA Securities has reduced its price target on Lululemon Athletica Inc. (NASDAQ:LULU) to $185.00 from $210.00 while maintaining a Neutral rating on the stock. The stock, currently trading at $165.78, has declined 56.65% year-to-date, though InvestingPro analysis suggests it may be undervalued at current levels.

The adjustment follows Lululemon’s recent earnings report, with BofA Securities analyst Lorraine Hutchinson citing "slower China growth and better tariff mitigation" as key factors in the revised outlook. Despite challenges, the company maintains impressive gross profit margins of 59.1%.

Despite the lower price target, BofA Securities raised its fiscal 2026 earnings per share estimate by 1% to $13.15, suggesting some confidence in the company’s long-term performance.

The new $185 price objective represents a reduction in the price-to-earnings multiple from 16x to 14x, which BofA Securities indicates better aligns Lululemon’s valuation with peers showing similar growth profiles.

BofA Securities maintained its Neutral rating on Lululemon stock, noting that "the lower multiple is offset by the risks to LULU’s turnaround."

In other recent news, Lululemon Athletica Inc. reported second-quarter normalized earnings per share of $3.10, slightly down from $3.15 year-over-year but surpassing consensus estimates by $0.24. However, the company’s revenue of $2.53 billion fell short of expectations by $15 million. Following these results, Truist Securities downgraded Lululemon from Buy to Hold and reduced its price target to $170, citing disappointing performance and tariff concerns. KeyBanc Capital Markets also downgraded the company from Overweight to Sector Weight, highlighting weak U.S. growth as a significant factor. Additionally, Rothschild Redburn lowered its price target for Lululemon to $160 due to challenges in North America and slowing growth in Greater China. CFRA adjusted its price target to $270 from $375, maintaining a Strong Buy rating despite product issues and tariff headwinds. Truist Securities maintained a Buy rating and a $290 price target, even as Lululemon cut its full-year guidance. These developments reflect a challenging environment for Lululemon, with analysts expressing concerns over tariffs and growth rates.

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