Habib Ur Rehman
2 min read
In This Article:
Bernstein SocGen's Aneesha Sherman is holding its Outperform rating on Lululemon Athletica Inc. (NASDAQ: LULU), but kept the price target unchanged at $350.00. Even though the firm's analyst is supportive of the company's long-term strategy, they noted short-term headwinds in the U.S and cast doubt on near-term comparable sales growth.
The analyst is skeptical that domestic performance will improve meaningfully this quarter. At the same time, they’re not yet convinced that expansion in China can fully offset the pressure from the company’s maturing U.S. base. Despite this, Lululemon’s fundamentals remain solid, with gross margins standing at 59.2%, and revenue having grown 10.1% over the past twelve months.
Eric Broder Van Dyke/Shutterstock.com
The longer-term view is more favorable. Sherman expects steady gains in China and incremental margin improvements to support earnings growth over time. The firm’s $350 target is grounded in a 20.5x multiple of projected FY2026 EPS.
The analyst acknowledges the imbalance between Lululemon’s slowing U.S. market and its faster-growing international operations. For now, they’re looking for signs of stabilization in U.S. sales and continued strength in China before reassessing their stance.
Last month we shared a bullish thesis on LULU stock.
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Disclosure: None.
