Lululemon Athletica Inc. (LULU) PT Lowered to $370 at Stifel

Stifel analyst Jim Duffy lowered the price target on Lululemon Athletica Inc. (NASDAQ: LULU) to $370.00 (from $416.00) while maintaining a Buy rating.

The analyst comments "Risk-focused sentiment and negative share price re-rating appears overdone, as the market anticipates a miss and guide-down for FY24. We acknowledge misstep related U.S. consumer engagement challenges, and adjust 2Q24 estimates to $2,362mn revenue and $2.88 EPS, below the low-end of guidance for $2,400-$2,420mn revenue and $2.92-$2.97 EPS. We expect a -5% haircut to FY24 EPS guidance to $13.50-$13.70 (vs. current $14.27-$14.47), reflecting -$500mn revenue and a 30% decremental margin. Key to the stock is credibility for sustainable U.S. growth which has been called into question by bears. Considering brand strength, innovation competency, standout economics, international opportunities, and relative value vs. large cap athletic peers (LULU 17x P/E on updated FY25E EPS vs. out-year P/E of 23x for NKE and 29x for ADS-DE on consensus estimates) we see 12 mos. risk/reward as favorable. Our updated $370 TP represents 24.7x P/E on $15.01 FY25E EPS."

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