2024-07-30 04:25:00 ET
Lululemon Athletica (NASDAQ: LULU) has been one of the most disruptive companies in the apparel industry in the last generation. It essentially invented the athleisure segment, making high-end yoga pants fashionable, but it has struggled recently, and now, one prominent Wall Street analyst has cut his rating on the stock.
In a note on Thursday, Citigroup analyst Paul Lejuez downgraded Lululemon from buy to neutral and lowered his price target to $300 from $410. At his new price target, Lejuez still sees an upside of 16% for the stock over the next 12 months, but it's clear he's not as excited about it as he once was.
Lejuez noted that growth in the active apparel category is decelerating, and pointed to consumer weakness in China. He also noted that the design of the company's new Breezethrough leggings had been widely criticized by customers. On Thursday, after the company announced it was pausing sales of the Breezethrough line, its stock price tanked.
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1 Wall Street Analyst Thinks Lululemon Stock Is Going to $300. Is It a Buy at Around $250?