Lululemon Athletica Inc. (LULU) PT Lowered to $350 at Raymond James

Raymond James analyst Rick Patel lowered the price target on Lululemon Athletica Inc. (NASDAQ: LULU) to $350.00 (from $400.00) while maintaining a Outperform rating.

The analyst comments "We lower our F2Q and FY24 revenue estimates and are now modestly below the Street to reflect: 1) LULU pulling its Breezethrough fabric in July (not material on its own, but we think it puts more pressure in other innovation to outperform as 2024 moves forward), 2) our mixed channel checks, and 3) unfavorable read-throughs from companies that target more affluent (>$100K income) U.S. consumers. Based on our conversations with investors and the stock's underperformance, we view the market may be bracing for a guidance cut. We still see 2H benefiting from better in-stock of key items (smaller sizes, colors), which should help revenue accelerate modestly vs 1H, as planned. While we expect the U.S. backdrop to remain challenged, we also remain confident in the merits of LULU’s long-term drivers, especially international growth given it remains highly underpenetrated (only 20% of revenue) versus other major global brands (>50% of revenue). Valuation also remains compelling (P/E of 17.5x vs 20x for peer group) given LULU’s growth and margin profile remain well above industry average."

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