Credit Suisse Downgrades Lululemon Athletica Inc. (LULU) to Neutral; Markdown Intensity Up

November 16, 2016 6:21 AM EST
Get Alerts LULU Hot Sheet
Price: $67.92 --0%

Rating Summary:
    24 Buy, 13 Hold, 6 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Credit Suisse downgraded Lululemon Athletica Inc. (NASDAQ: LULU) from Outperform to Neutral with a price target of $53.00 (from $76.00), noting markdown intensity is up year-over-year.

Analyst Christian Buss commented, "Our proprietary pricing and inventory analysis suggests markdown intensity has increased for lululemon this quarter – the 2.7% rate is higher both Y/Y (2.5%) and sequentially (2.0%). With an increase in discounting in Women's Tops particularly, we have less conviction in the company being able to sustain recent topline momentum, which we view as crucial in supporting earnings recapture. As a result, we lower our FY16 comp assumption to 5.1% from 6.2% and reduce our forward multiple to 25x from 30x as the benefits from restructuring and margin recapture moderate. We downgrade shares to Neutral, adjust estimates, and lower our Target Price to $53 from $76."

For an analyst ratings summary and ratings history on Lululemon Athletica Inc. click here. For more ratings news on Lululemon Athletica Inc. click here.

Shares of Lululemon Athletica Inc. closed at $56.81 yesterday.

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