UBS analysts reiterated a Neutral rating and a $360 price target for Lululemon Athletica (NASDAQ:LULU), citing questions around the company’s ability to restore its growth momentum in the Americas by 2025. This uncertainty could significantly impact Lululemon’s long-term earnings prospects and valuation.
While the UBS Evidence Lab’s annual global athletic wear survey highlights the brand’s strong global presence, there are indications that Lululemon’s appeal in the U.S. market may have reached its peak. Historically, brands that experience plateauing growth in their core markets face challenges in reigniting momentum. This raises doubts about Lululemon’s ability to meet or exceed Wall Street’s growth expectations for the Americas in the coming years.
With limited confidence in a meaningful rebound in U.S. sales growth, the Neutral rating reflects caution regarding the stock’s near-term potential. While Lululemon remains a global leader in the athletic wear space, its performance in the key U.S. market will be critical to sustaining its growth trajectory.