Lululemon Athletica Inc. (LULU) PT Lowered to $415 at Citi

Citi analyst Paul Lejuez lowered the price target on Lululemon Athletica Inc. (NASDAQ: LULU) to $415.00 (from $500.00) while maintaining a Buy rating.

The analyst comments "We anticipate a relatively in-line 1Q (6/5 AMC). Sentiment has turned significantly negative with shares -40% since 4Q EPS (3/21). Bears point to stepped-up competition, high valuation, and lack of acceleration in industry data in May as reasons to stay negative. During mgmt meetings we hosted on 4/19 (link), mgmt cited product execution issues as partially explaining weaker US trends, and expected a May improvement as new products/color were introduced. While May may not have picked up significantly, we don’t think trends have gotten worse, and overall believe the Americas could grow modestly in F24. With int’l (particularly China) still very strong and flexibility in SG&A, we believe F24 EPS downside is limited. We expect mgmt to lower F24 EPS guidance to $13.80-14.00 (vs cons $14.15). With expectations low, sentiment very negative and shares pricing in a more significant guidance cut, we see favorable risk/reward into 1Q EPS."

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