UBS lowered its price target on Lululemon Athletica Inc. (LULU) to $106 from $120. The firm maintained a "Neutral" rating on the stock.
This adjustment followed a second-quarter report. The report showed a revenue decline and reduced guidance for fiscal year 2026. Lululemon's shares fell after the report, which missed revenue expectations.
UBS analysts cited concerns. These included product assortment, weak store traffic, and significant margin pressure. The margin pressure resulted from deleveraging fixed costs on lower sales.
UBS believes fundamental improvements are unlikely until the second half of 2027. A new CEO will need time to implement a turnaround plan.
Morgan Stanley and Wells Fargo also recently lowered their price targets. They cited weakening demand and reduced forecasts.