Lululemon price target cut at Raymond James on lower sales estimates

As previously reported, Raymond James analyst Rick Patel lowered the firm’s price target on Lululemon to $350 from $400 and keeps an Outperform rating on the shares. The firm lowered its Q2 and FY24 revenue estimates and notes its forecasts are now “modestly below the Street,” reflecting Lululemon pulling its Breezethrough fabric in July, mixed channel checks, and unfavorable read-throughs from companies that target more affluent U.S. consumers. However, based on the analyst’s conversations with investors and the stock’s underperformance, the firm believes the market “may be bracing for a guidance cut” and still sees the company benefiting from better in-stock of key items in the second half and remains confident in the merits of Lululemon’s long-term drivers, the analyst say in a preview note.