UPDATE: Bernstein Starts Lululemon Athletica Inc. (LULU) at Underperform

Bernstein initiates coverage on Lululemon Athletica Inc. (NASDAQ: LULU) with a Underperform rating and a price target of $260.00.

The analyst comments "Coming off a four-year run of 20-25+% sales growth driven by athleisure, e-commerce and the covid pull-forward, growth is now set to decelerate to low double digits. Industry-leading margins see multiple headwinds: The lucrative e-comm mix shift is done, international growth is margin dilutive, marketing doesn't lever, and Mirror will continue to lose money. With 13% BERNe EPS growth over the next few years vs. 31% in the pre-covid years, this is no longer the high-growth quality compounder it was, yet it still carries the same price tag. We value LULU at 30x P/E, a touch below Nike and Adidas, vs. 30-35x pre-covid."

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 $291.55 yesterday.

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