On Tuesday, Piper Sandler confirmed its positive stance on Lululemon Athletica Inc. (NASDAQ:LULU) shares, maintaining an Overweight rating and a $420.00 price target. The endorsement comes as the athletic apparel company approaches its earnings report scheduled for March 27, 2025. InvestingPro analysis suggests the stock is currently undervalued, with analyst targets ranging from $194 to $500, reflecting the market’s mixed sentiment about the company’s growth prospects.
Ashley Owens, an analyst at Piper Sandler, highlighted the company’s robust performance as evidenced by key financial indicators. "We remain optimistic on LULU ahead of its earnings report," Owens stated. Data from the KFL credit card showed a significant year-over-year increase of 26.1% in February. This growth not only represents a continuation of the company’s positive trajectory but also an acceleration from the previous month. The company’s financial strength is reflected in its impressive 58.85% gross profit margin and 10.84% revenue growth over the last twelve months, according to InvestingPro data.
Lululemon’s recent product launches have also played a part in bolstering analyst confidence. The introduction of the new women’s "Glow Up" fabric has been met with a generally positive response from consumers. This reception is particularly notable given the mixed reactions to last year’s Breezethrough product line.
Despite the anticipated strong results for the fourth quarter and ongoing momentum, Owens suggests that Lululemon may still present a cautious outlook for the fiscal year 2025, reflecting the current climate of broader economic uncertainty. Nevertheless, Piper Sandler has opted to keep its estimates unchanged in anticipation of the forthcoming earnings report.
Investors and market watchers eagerly await the release of Lululemon’s financial results later this month to gauge the company’s performance and future prospects within the competitive athletic wear industry.
In other recent news, Lululemon Athletica Inc. has been the focus of several analyst reports, highlighting key developments for investors. Truist Securities reiterated a Buy rating with a $460 price target, emphasizing Lululemon’s brand momentum on TikTok and improved product assortment, which are seen as driving factors for its North American business recovery. Stifel analysts also maintained their Buy rating, setting a price target at $438, citing a positive turnaround in the U.S. women’s segment, which is crucial for the company’s revenue. Erste Group initiated coverage with a Buy rating, noting Lululemon’s strong sales growth, operating margin, and return on equity as indicators of its competitive strength. Bernstein analysts reaffirmed their Outperform rating and $460 price target, citing expected growth in the Americas and China, along with an improved product lineup. These recent developments underscore a consensus among analysts about Lululemon’s strong positioning and growth potential in the market.
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