BofA update shows where active managers are putting money
Investing.com - Wells Fargo (NYSE:WFC) has reduced its price target on Lululemon Athletica Inc. (NASDAQ:LULU) to $225.00 from $270.00 while maintaining an Equal Weight rating on the stock. The stock currently trades near its 52-week low of $191.44, with InvestingPro data showing the shares are trading at 13.3x earnings.
The firm cited expectations for continued downward revisions to earnings estimates, suggesting that another guidance reduction may be forthcoming from the athletic apparel retailer. Despite recent challenges, InvestingPro analysis indicates strong fundamentals with industry-leading gross margins of 59.3% and a healthy financial score.
Wells Fargo analyst projections now put Lululemon’s 2025 earnings per share at $14.60, falling at the lower end of the company’s current guidance range of $14.58-14.78.
More significantly, the firm lowered its 2026 earnings estimate to $14.90, considerably below the Street consensus of $15.52, indicating that the negative revision cycle that began in January could continue.
The new price target is based on a 15x multiple, which Wells Fargo described as "admittedly trough levels of multiple, but justified due to mis-execution + ’over-earning’ risk."
In other recent news, Lululemon Athletica Inc. has been the focus of several analyst adjustments and strategic developments. Piper Sandler has lowered its price target for Lululemon to $200, citing increased competition from brands like Alo and Vuori, which have expanded their market presence in key states and Canada. Jefferies also reduced its price target to $160, maintaining an Underperform rating due to growth concerns, as Lululemon opened its first Italian store in Milan, while competitor Alo Yoga prepares to launch in Rome. Evercore ISI adjusted its price target to $265, removing Lululemon from its Top 5 Outperform list and replacing it with Ulta Beauty (NASDAQ:ULTA), but still sees an 18% upside based on its 2026 earnings estimate.
Meanwhile, Lululemon announced the opening of its first Italian store in Milan’s central shopping district, offering a range of men’s and women’s collections. Stifel maintained its Buy rating with a price target of $324, emphasizing the company’s innovation cycle, which could drive growth in the U.S. women’s business. These recent developments indicate a mixed outlook from analysts, with varying price targets and ratings reflecting differing perspectives on Lululemon’s growth and competitive challenges.
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