BMO Capital Markets initiated coverage on Lululemon Athletica (LULU) with an "underperform" rating. The firm set a $70.00 price target. This target implies a potential downside of over 32% from the stock's previous closing price. BMO's cautious stance coincides with new CEO Heidi O'Neill beginning her tenure.
BMO's analysis highlights concerns over weakening consumer demand in North America and China. The firm also noted growing pressure on Lululemon's historically strong profit margins. BMO suggests the athletic apparel maker faces a challenging period requiring a "full reset." This initiation adds to a broadly cautious analyst sentiment surrounding the stock.