Lululemon Downgraded to Neutral by JPMorgan Analyst Matthew Boss.

JPMorgan analyst Matthew Boss downgraded Lululemon (LULU) to Neutral from Overweight with a $224 price target. The downgrade was based on the company's high valuation and slowing growth in the athletic apparel market.

JPMorgan analyst Matthew Boss downgraded Lululemon Athletica (NASDAQ:LULU) from "Overweight" to "Neutral" on Tuesday, July 1, 2025, with a new price target of $224. The downgrade reflects the company's high valuation and slowing growth in the athletic apparel market. Boss cited elevated markdowns and a more moderate revenue growth profile, driven by challenges in the U.S. market and a normalizing pace of growth in China. Additionally, the analyst highlighted a more cautious, discerning consumer in the U.S. due to a challenging macroeconomic backdrop. The stock opened at $223.21 on Tuesday, down 2.9% from the previous close [1].

The downgrade comes amidst a mixed bag of analyst opinions. While Goldman Sachs and Needham & Company have recently reduced their price targets, other analysts have maintained a "buy" rating. The company's average rating remains "Moderate Buy" with an average target price of $337.53. The stock has a 50-day moving average price of $269.27 and a 200-day moving average of $311.00, indicating a relatively stable trend [1].

Lululemon's latest earnings report, released on June 5, 2025, showed earnings per share (EPS) of $2.60, meeting the consensus estimate. The company reported a net margin of 16.82% and a return on equity of 43.48%. Revenue for the quarter was $2.37 billion, up 7.3% year-over-year. Analysts expect Lululemon to post $14.36 EPS for the current year. However, the stock's valuation remains high, with a price-to-earnings (P/E) ratio of 15.12 and a price-to-earnings-growth (PEG) ratio of 1.95 [1].

Institutional investors have shown continued interest in Lululemon, with several firms increasing their stakes in the fourth quarter. Dnca Finance, Lido Advisors LLC, Belpointe Asset Management LLC, Colonial Trust Co SC, and MV Capital Management Inc. all boosted their holdings in the company. Institutional investors currently own 85.20% of the stock [1].

The downgrade by JPMorgan reflects a broader trend of caution in the athletic apparel market. While Lululemon remains a strong brand, the company faces challenges in maintaining its growth momentum in a slowing market. Investors should closely monitor the company's ability to adapt to these challenges and maintain its competitive edge.

References:
[1] https://www.marketbeat.com/instant-alerts/lululemon-athletica-nasdaqlulu-downgraded-to-neutral-rating-by-jpmorgan-chase-co-2025-07-22/
[2] https://seekingalpha.com/news/4469782-lululemon-falls-after-jpmorgan-warns-of-an-elevated-level-of-markdowns-and-cautious-consumer-spending