Stifel Slashes Lululemon Athletica Price Target to $370, Maintains Buy Rating - Market Analysts Caution on Near-Term Prospects
In a recent development, Stifel, a leading financial services company, has revised its price target for Lululemon Athletica Inc. (NASDAQ: LULU) shares, lowering it to $370 from the previous target of $416. Despite this adjustment, Stifel continues to recommend a Buy rating for the stock.
The revised outlook reflects a cautious stance on Lululemon's near-term prospects, as market sentiment indicates a potential earnings miss and a downward revision of the full-year 2024 (FY24) guidance. The analyst from Stifel cited challenges in engaging U.S. consumers as a key factor driving the revised estimates.
The new revenue estimate for Lululemon stands at approximately $2.362 billion with earnings per share (EPS) at $2.88, falling below the company's guidance range. Stifel anticipates a 5% reduction in EPS guidance for the full year, adjusting it to a range of $13.50 to $13.70.
Despite the challenges, Stifel highlighted Lululemon's strengths, including innovation, strong economics, and international growth opportunities. The firm also noted the relative value of Lululemon compared to its peers in the athletic apparel industry.
Stifel's updated price target of $370 implies a favorable risk/reward profile for Lululemon's stock over a 12-month horizon. Real-time data from InvestingPro shows that Lululemon's market capitalization is $33.2 billion, with a P/E ratio of 21.34, indicating potential undervaluation.
InvestingPro Tips suggest that Lululemon's financial stability, profitability outlook, and growth metrics may offer reassurance to investors. Despite the caution from Stifel, Lululemon's revenue growth and gross profit margin remain strong, supporting its long-term growth potential.
In conclusion, while Stifel's revised price target may signal short-term challenges for Lululemon, investors should consider the company's underlying strengths and long-term growth prospects when making investment decisions.
(Note: This article was created with AI assistance and reviewed by an editor for accuracy.)