Lululemon (LULU) Price Target Increased by Citi, Rating Maintained

On Wednesday, May 28, Citi analysts raised the price target for Lululemon Athletica Inc. (NASDAQ:LULU) from $275 to $325 but maintained a “Neutral” rating. This decision comes before the company’s financial results for the first quarter of fiscal 2025, which will be released after the market closes on June 5.

Lululemon (LULU) Price Target Increased by Citi, Rating Maintained

A store employee in an athletic apparel store restocking merchandise.

Citi’s analysis indicates that Lululemon Athletica Inc. (NASDAQ:LULU) might exceed Q1 fiscal 2025 EPS expectations, supported by stronger comparable sales than consensus estimates in both the Americas and China. Citi expects that comparable sales in the Americas will be in line with the fourth-quarter results, while the consensus estimate suggests a 1% decline. The launch of the Align No Line pants, a new product, is expected to help sales in the Americas. In the second quarter, Citi projects a 2% rise in sales. This compares to a consensus estimate of a 1% decline.

Citi analysts also expect Lululemon Athletica Inc.’s (NASDAQ:LULU) management to confirm the full-year 2025 EPS guidance of $14.95 to $15.15, which is based on low single-digit growth in comparable sales in the Americas. The performance of comparable sales in China is also a key area of focus, especially because of economic uncertainties. According to Citi’s analysis, if Lululemon Athletica Inc. (NASDAQ:LULU) reports comparable sales in China in line with the consensus estimate of a 14% increase, it could negatively affect the stock. Citi estimates that comparable sales in China will rise by 22%.

While Citi expects Lululemon Athletica Inc. (NASDAQ:LULU) to surpass Q1 estimates and sees steady trends in the US, the firm’s analysis suggests that more new products, beyond the Align No Line pants, are needed to boost confidence in the company’s future growth in the US.

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