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Disappointing Q1 and FY24 gross sales steering could have launched a “cloud of uncertainty” over Lululemon (NASDAQ:LULU) however Oppenheimer analyst Brian Nagel views underlying progress dynamics nonetheless intact and improved innovation and advertising and marketing ought to bolster gross sales enlargement.
The inventory stays Oppenheimer’s bigger cap decide inside athleisure and sporting items retail and the agency maintains its Outperform ranking on the agency. However Nagel now not views Lululemon as a prime decide in its broader Client Progress & eCommerce protection, owing to larger near-term dangers and uncertainty.
And with the inventory 30% off its December excessive, Nagel minimize his worth goal by 17% to $445 based mostly on a decrease a number of vary of 27-29x (from 32-34x) utilized to lowered FY25 estimated EPS of $15.90.
“We are inclined to look upon the present valuation of LULU as discounted, however not completely washed out. We proceed to suggest LULU and stick to the title as a favourite bigger cap decide inside athleisure and sporting items retail as a result of our views of underlying progress and enlargement potential for the model as nonetheless comparatively sturdy inside the classes,” Nagel mentioned in Friday’s analysis report.
Regardless of some extra bearish views on the company’s outlook, analysts are principally bullish on Lululemon (LULU) with Seeking Alpha authors and Wall Street analysts ranking the inventory as a Purchase. Searching for Alpha’s Quant Score sees Lululemon (LULU) as a Maintain.
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