Lululemon Stock Records Worst Drop In A Year After Analysts Lower Price Targets On Weak Outlook: Retail Investors Bearish

Shares of Lululemon Athletica Inc. (LULU) closed 14.2% lower on Friday, their worst fall in a year after the company's weak outlook prompted price target cuts from several Wall Street brokerages.

The stock ended at $293.06, its lowest level in over five months.

Since the athletic wear company's quarterly report on Thursday, at least 15 analysts, including Bernstein and JP Morgan, have cut their price targets for Lululemon, according to The Fly.

Barclays, which cut its price target to $309 from $411, said Lululemon's guidance for the first quarter and fiscal year 2025 came in about 7% and 2% below consensus, respectively. The brokerage said it is waiting for further visibility of business improvement in the Americas market.

Needham lowered its price target to $366 from $430 and said that a product-driven acceleration in the company's topline could potentially be positive for the stock. However, it said that achieving this re-acceleration depends on the macro environment.

UBS said it does not see Lululemon's growth rate accelerating meaningfully and cut its price target to $335 from $376.

Raymond James lowered its rating on LULU to 'market perform' from 'outperform.’ Despite favorable initial reads from recent product launches, the U.S. remains challenged for Lululemon, and the market will grow only modestly this year, the research firm said.

The brokerage actions come after Lululemon forecasted fiscal 2025 revenue and earnings below analysts' estimates and called out a business hit from President Donald Trump's tariffs.

The company said consumers were spending less due to economic and inflation concerns, resulting in lower U.S. traffic at Lululemon and its peers.

Competitor Nike Inc. (NKE) had also noted that macro trends, including geopolitical tensions, tariffs, and currency fluctuations, were weighing its quarterly outlook.

On Stocktwits, the sentiment for LULU was 'bearish' while message volumes were at 'extremely high’ levels.

LULU sentiment and message count as of March 30 | Souce: Stocktwits

Some users said they expected the stock to bounce back on Monday.

Currently, 19 of 35 analysts have a 'buy' or higher rating on LULU, while 12 recommend 'Hold,’ according to Koyfin data. Their average price target is $366.69, implying a 25% upside from current levels.

Shares are down 23.4% year to date.

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