Piper Sandler Reduces PT on lululemon athletica (LULU) Stock

lululemon athletica inc. (NASDAQ:LULU) is one of the Reddit Stocks with the Highest Upside Potential. On July 29, Piper Sandler reduced the price target on the company’s stock to $200 from $270, while keeping a “Neutral” rating, as reported by The Fly. As per the firm, the fall in lululemon athletica inc. (NASDAQ:LULU)’s shares this year was because of a correction in the multiple. In Q1 2025, the company achieved growth throughout its channels, categories, and markets, including the US, demonstrating the continued strength and agility of its business model.

Amidst the dynamic macro environment, lululemon athletica inc. (NASDAQ:LULU) plans to leverage its robust financial position and competitive advantages to play offense, while it continues to invest in growth opportunities. In Q1 2025, its net revenue rose 7% to $2.4 billion, or 8% on a constant dollar basis, with the Americas net revenue rising 3% and the International net revenue increasing 19%. For Q2 2025, lululemon athletica inc. (NASDAQ:LULU) anticipates net revenue of between $2.535 billion – $2.560 billion, reflecting growth of 7% – 8%.

RGA Investment Advisors, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:

“Late in the quarter, we purchased shares in Lululemon athletica inc. (NASDAQ:LULU), despite uncertainty about the tariff situation. Many of you are familiar with the brand. Lulu is a leading athleisure brand and though competition has increased from upstart offerings like Vuori, Alo and Fabletics, the company has continued to maintain relevance and perform admirably. These upstarts have varied approaches, but in aggregate, they have won share with a combination of faster, more tasteful fashion and cheaper prices. Importantly, this share has predominantly come from Nike–the 10,000 pound gorilla of the industry that continues to see negative topline growth. Even within the competitive landscape, it is notable that Vuori and Alo enthusiasts still consider Lulu core to their wardrobe, given the demonstrable quality advantage of the company’s proprietary fabrics. Although Lulu has benefited from dominance in fashion, its core calling has been performance and that segment of the market remains unquestioned.

For Lulu, U.S. Women’s in particular has slowed, though the company continues to drive growth in the men’s market, while expanding geographically to China and Europe. The slowdown in women’s seems tied both to broader weakness in apparel, particularly athleisure, and to rising competitive pressure – factors that have contributed to investor caution.. Meanwhile, China alone holds the potential to double the scale of Lulu’s business should the company attain a similar degree of resonance as Nike. We are not expecting this to be the case, though it is a notable source of potential upside…” (Click here to read the full text)

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Disclosure: None. This article is originally published at Insider Monkey.