Lululemon Sees Another Price Target Cut After Weak Outlook, Stock Decline: Retail Feels Bullish For Now

Analysts are taking a cautious view of companies selling non-essential items, as tariffs could drive up prices and weaken consumer demand.

Piper Sandler became the latest Wall Street brokerage to cut its price target on Lululemon Athletica Inc. (LULU), citing its downward revision of the company's earnings estimates from tariff pressure.

Analysts are taking a cautionary view on companies that sell discretionary items, which would likely face weak demand if consumer prices increase.

The Wall Street research firm lowered its price target on Lululemon shares to $280 from $315, and kept a 'Neutral' rating, according to The Fly.

The investment firm now anticipates Lululemon to achieve a 5% increase in sales for fiscal year 2025, which is at the lower end of the company's own guidance, and a 6% rise for fiscal year 2026.

Earnings before interest and taxes (EBIT) margins are expected to contract by 180 basis points in 2025, more than the 100 basis points decline suggested by the company's guidance, and by 80 basis points in 2026.

In recent days, other brokerages, such as Stifle, Truist, and Baird, have also cut their price targets.

Lululemon sells premium athletic wear for sports, including yoga, running, and training.

Last month, the company issued a weak outlook for the business. It forecasted fiscal 2025 revenue and earnings below analysts' estimates and called out a business hit from President Donald Trump's tariffs.

On Stocktwits, retail sentiment was in the 'bullish' territory, up from 'neutral' a week ago, with low message volume as of late Sunday.

Several users posted comments suggesting that Lululemon's products are overpriced and that the company's business is in trouble. One suggested selling any position quickly.

Shares of LULU are down 31.7% year to date.

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