Bitcoin price today: falls to 2-week low below $113k ahead of Fed Jackson Hole
Investing.com - Wells Fargo (NYSE:WFC) lowered its price target on Lululemon Athletica Inc. (NASDAQ:LULU) to $205.00 from $225.00 on Tuesday, while maintaining an Equal Weight rating on the athletic apparel retailer’s stock. The stock, currently trading at $203.62, has declined over 44% in the past six months, according to InvestingPro data.
The price target reduction comes as Wells Fargo analyst Ike Boruchow cited concerns about the elimination of the de minimis exception, which previously allowed companies to ship orders duty-free from outside the United States into the country. This exception was originally scheduled to expire in 2027, but a July 30 executive order accelerated its removal to August 29, 2025. Despite these challenges, InvestingPro data shows LULU maintains impressive gross profit margins of 59.3% and operates with moderate debt levels.
Wells Fargo believes Lululemon utilizes the de minimis exemption through Canada, unlike competitor Tapestry (NYSE:TPR) Inc. which operates through Mexico. The firm’s research suggests Lululemon’s exposure could be more significant due to its heritage Canadian distribution center network.
The bank estimates that 50-60% of Lululemon’s U.S. e-commerce revenue benefits from the de minimis exception, compared to Tapestry’s 40-45% exposure. Under these assumptions, Wells Fargo projects a potential $0.90-$1.10 earnings per share headwind for Lululemon from the elimination.
The impact stems from duties jumping from 0% under the de minimis exception to over 30% with fully stacked tariffs, which will pressure margins within Lululemon’s U.S. e-commerce business starting August 29.
In other recent news, several financial firms have adjusted their price targets for Lululemon Athletica Inc. amid various market challenges. TD Cowen has lowered its target to $298, maintaining a Buy rating, citing macroeconomic pressures and increased competition affecting both physical and online sales. UBS has adjusted its price target to $240, with a Neutral rating, due to tariff concerns and modest U.S. sales growth of around 1% in the second quarter. Wells Fargo has set a new target of $225, expressing concerns about potential downward revisions in earnings estimates. Piper Sandler has reduced its target to $200, highlighting competitive pressures from brands like Alo and Vuori, which have expanded their market presence in key states. Jefferies has also lowered its target to $160, maintaining an Underperform rating, following Lululemon’s recent store opening in Milan and noting competition from Alo Yoga’s expansion plans in Rome. These developments reflect a cautious outlook from analysts regarding Lululemon’s financial performance and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.