In a report published Friday, Wedbush analyst Betty Chen downgraded the rating on Lululemon Athletica LULU from Outperform to Neutral, but reiterated the $75.00 price target.
In the report, Chen noted, “Following our national survey of 300 LULU customers, we are downgrading shares to NEUTRAL from OUTPERFORM as results suggest: (1) consumer perception of quality erosion, which has not been properly addressed by management, (2) LULU may be losing dominance in yoga apparel as competition gains mindshare, and (3) only ~10% of respondents plan to buy more upon restocking of black luon bottoms, suggesting limited pent up demand in Q2/H2. These issues, combined with the stock exceeding our $75 PT, lead us to move to the sidelines.”
Lululemon Athletica closed on Thursday at $76.88.
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Posted In: Analyst ColorDowngradesAnalyst RatingsApparel, Accessories & Luxury GoodsConsumer DiscretionaryWedbush
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