Habib Ur Rehman
1 min read
In This Article:
BofA Securities has lowered its price target on Lululemon (NASDAQ: LULU) from $400 to $370 while maintaining a Buy rating a couple of weeks ago. The revision followed updated guidance from the company, which kept its fiscal 2025 sales forecast intact but trimmed its earnings outlook by 2.5%. The new EPS range stands at $14.58 to $14.78.
The adjustment was supposed to show expected pressure from tariffs and a slightly more promotional retail landscape. Tariffs are forecast to reduce margins by 40 basis points this fiscal year, with a sharper 60 basis point hit expected in Q2. Mitigation efforts are slated to start in the second half.
Despite the earnings revision, BofA remained upbeat on the company’s broader trajectory. Sales plans are reportedly on pace, and early product launches have shown promise, with more scale expected in the coming months. Management also plans targeted price hikes and sourcing improvements to protect margins.
LULU shares lost 30% of their value since BofA's call and currently trade at a trailing P/E of 15.
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Disclosure: None.
