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Lululemon Shares Downgraded, Here's What's Changed

Brett Hershman

Lululemon Athletica inc. (NASDAQ: LULU) has been downgraded from a Buy rating to a Hold by analysts at Stifel citing sector challenges and execution risk.

“We remain constructive on the Company’s potential to leverage brand authenticity for global growth but also remain mindful o execution risks and external factors that could challenge fundamental progress,” said Stifel analyst Jim Duffy.

Despite the downgrade, Stifel raised its price target from $60 to $66.

The downgrade does not come from a loss of relevance in the market, but is due to the struggling athletic apparel sector, whihc is seeing consolidation and a fundamental shift to direct to consumer initiatives.

Lululemon does stand to see some benefit from the recent strength in the Canadian dollar which is expected to prop up revenue and earnings in quarters two thru four.

Key Risks For Lululemon

“Contemplative of near-term upside potential, longer term opportunities, and risks, we are challenged to justify sufficient risk adjusted valuation to support a buy rating,” said Duffy.

Shares of Lululemon were down 1.39 percent on Tuesday.

Related Links:

Lululemon Has Room For Valuation, Earnings Upside This Year

Jim Cramer Shares His Thoughts On Lululemon And Canada Goose

Latest Ratings for LULU

Date Firm Action From To
Jul 2017 Stifel Nicolaus Downgrades Buy Hold
Jul 2017 Needham Initiates Coverage On Buy
Jul 2017 Oppenheimer Maintains Outperform

View More Analyst Ratings for LULU
View the Latest Analyst Ratings

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