Lululemon defended at Raymond James despite disappointing margin guide
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Lululemon Athletica (NASDAQ:LULU) is still viewed bullishly at Raymond James despite a downbeat pre-announcement at ICR on Monday.

Shares of the Canadian apparel retailer fell nearly 10% on Monday after slating gross margin declines for the fourth quarter and forecasting inventory levels to remain elevated into 2023. 

âThese updates are likely to keep sentiment in the penalty box near-term, but we continue to believe that LULU has one of the strongest growth algorithms in Global Brands,â Raymond James analyst Rick Patel told clients on Tuesday. âThe 4Q GM% miss is disappointing, but we donât believe it diminishes LULUâs [long-term] potentialâ¦We see much of LULUâs GM% pressure in 2022 as transitory and still see the company unlocking stronger margins as inventories normalize and lower freight costs work through the P&L.â

He added that he views the stark sell-off for the stock as a buying opportunity. Patel retained a Strong Buy rating on the stock and $438 price target. Shares of Lululemon (LULU) slipped 0.35% shortly before Tuesdayâs market open.
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