Fannie Mae, Freddie Mac shares tumble after conservatorship comments
On Friday, Piper Sandler analysts lowered the price target for Lululemon Athletica Inc. (NASDAQ: NASDAQ:LULU) to $270 from $315 while maintaining a Neutral rating. The decision follows the company’s first-quarter performance, where it exceeded sales and earnings per share (EPS) expectations by narrow margins. U.S. sales showed slight improvement, but comparable sales remained negative, and international sales decelerated, with Mainland China experiencing the most significant slowdown. According to InvestingPro data, seven analysts have recently revised their earnings estimates upward, and the company maintains a "GREAT" financial health score of 3.24, suggesting strong fundamental positioning despite near-term challenges.
Lululemon maintained its annual sales guidance, with second-quarter sales aligning with consensus estimates. However, it reduced its EPS forecast due to tariff impacts and concerns about consumer caution. Although discounting improved in the first quarter, the company expects higher markdowns for both the second quarter and the full year. Despite these challenges, the company maintains impressive gross profit margins of 59.2% and has demonstrated solid revenue growth of 10.1% over the last twelve months.
The company’s strategy to mitigate tariffs through pricing adjustments raised concerns. Lululemon plans to increase prices on a small portion of its product assortment, but these increases are described as modest. This approach has raised questions about the brand’s maturity in the U.S. market and its position within a competitive landscape.
Given these factors, Piper Sandler analysts adjusted their estimates and lowered the price target to reflect the ongoing pressures in the U.S. market. The new price target is based on an 18x multiple of the 2025 earnings estimate, compared to the previous 21x multiple.
The report highlights the challenges Lululemon faces as it navigates tariff impacts and competitive dynamics while attempting to maintain its growth trajectory in key markets.
In other recent news, Lululemon Athletica Inc. is preparing to report its first-quarter 2025 earnings, with several analysts weighing in on the company’s prospects. Piper Sandler analysts have raised their price target to $315, maintaining a Neutral rating, and expect Lululemon to exceed buy-side expectations for the upcoming earnings report. They anticipate a sales growth of 8% and earnings per share of $3.29 for the second quarter. Meanwhile, TD Cowen has increased their price target to $373, expressing confidence in Lululemon’s earnings potential despite tariff challenges. Stifel also maintains a Buy rating with a $353 target, forecasting that Lululemon will surpass their above-consensus estimates for the first quarter.
Goldman Sachs has lowered its price target to $285, citing weaker trends in the company’s core business, particularly in China and other international markets. They maintain a Neutral rating and highlight potential tariff impacts. Raymond (NSE:RYMD) James has reaffirmed their Market Perform rating, expressing caution about revenue growth due to macroeconomic uncertainties and tariff pressures. They project a 7% revenue increase for the first quarter, aligning closely with consensus estimates. Despite varying perspectives, analysts generally agree on the importance of Lululemon’s strategic pricing and international expansion in navigating current challenges.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.