Envirotech Vehicles appoints Jason Maddox to board of directors
On Tuesday, Raymond (NSE:RYMD) James analysts reaffirmed their Market Perform rating on Lululemon Athletica Inc. (NASDAQ: NASDAQ:LULU) stock. This decision comes as the company prepares to announce its first-quarter earnings for fiscal year 2025 on Thursday. The analysts expressed caution about potential revenue growth, citing macroeconomic uncertainties and tariff pressures as key considerations. According to InvestingPro data, LULU maintains strong financial health with an overall score of "GREAT" and impressive gross profit margins of 59.2%.
The analysts noted that Lululemon’s stock has decreased by 13% year-to-date, although it has risen by 16% over the past month. Trading at $322.95, the stock currently has a P/E ratio of 22x, below the company’s five-year average of over 30x. InvestingPro analysis suggests the stock is currently undervalued, with additional metrics and insights available to subscribers. Despite this, the analysts do not find the risk-reward scenario particularly compelling due to potential domestic revenue and margin challenges.
Channel checks for the first quarter showed mixed results, with declines in store traffic but improved mobile app engagement. Google (NASDAQ:GOOGL) search trends remained consistent quarter-over-quarter. The analysts are uncertain whether new innovations are significantly boosting traffic or conversion rates, which they believe is crucial for sustained domestic growth. Despite these concerns, InvestingPro data shows the company maintains strong fundamentals with a healthy current ratio of 2.16 and more cash than debt on its balance sheet.
For the first quarter, Raymond James projects a 7% increase in revenue, aligning closely with the consensus estimate of 7.2%. The firm anticipates a 1.8% growth in the Americas and a 26.9% rise in China. They view international guidance as conservative and expect strong momentum, although they express concerns about the performance in the Americas, which is a major focus for investors.
The analysts also mentioned that gross margin guidance is under pressure from current tariffs, but they do not perceive significant risk as Lululemon has already accounted for these factors in its guidance. They see expense control as a potential source of earnings per share surprises, but remain cautious about whether such an outcome would positively impact the stock’s valuation.
In other recent news, Lululemon Athletica Inc. has seen a series of updates from various analysts regarding its financial outlook and stock performance. TD Cowen raised its price target for Lululemon to $373, maintaining a Buy rating, and expressed confidence in the company’s earnings potential despite tariff uncertainties. Stifel also upheld a Buy rating with a $353 target, citing strong performance in the U.S. women’s segment and international growth as positive indicators. Meanwhile, Citi increased its price target to $325 while maintaining a Neutral rating, highlighting the potential for Lululemon to surpass first-quarter earnings expectations, driven by strong sales in the Americas and China.
Conversely, BNP Paribas (OTC:BNPQY) Exane reiterated an Underperform rating with a $194 target, pointing to challenges in the North American market and concerns over product missteps and pricing strategies. Evercore ISI adjusted its price target down to $320 from $440 but maintained an Outperform rating, noting that Lululemon’s flexible inventory strategy and established brand status could mitigate tariff impacts. These recent developments reflect a diverse range of perspectives on Lululemon’s market position and future performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.