lululemon athletica Earnings Face Downside Risk in Next 12 Months, UBS Says

MT Newswires Live09-05 02:45

lululemon athletica (LULU) earnings are skewed toward "big downside" and "little upside" risk in the next 12 months as the sportswear retailer faces challenges in its core business, UBS said Friday.

The brokerage said in a note that lululemon's products are not resonating with consumers, while store traffic remains weak. A turnaround is not expected anytime soon, as its new Chief Executive Heidi O'Neill does not start until next week, it added.

UBS lowered its fiscal 2026 to fiscal 2028 EPS estimates by 12% to 15%, respectively, and cut its sales growth forecasts due to worsening global sales trends.

A pullback in the company's stock following a "disappointing" Q2 results and a reduced outlook does not represent a good buying opportunity, the firm added.

UBS maintained a neutral rating and cut its price target to $106 from $120.

Price: 100.35, Change: -21.42, Percent Change: -17.59

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