Jefferies says Lululemon’s long-term targets are overly aggressive, reiterates Sell rating
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After performing recent channel checks, Jefferies analyst Randal Konik voiced the opinion that Lululemon (NASDAQ:LULU) sales peaked earlier in the year. As such, he reiterated his Sell-equivalent rating on the stock given the lack of remaining upside.

Konik explained that a more uncertain macro environment, rising competition, and potential margin compression are among key headwinds promoting his bearish stance on the stock. He added that difficult year over year comparisons are likely to make the sales slowdown loom larger in the mind of investors as the company likely misses its ambitious targets, in his opinion.

âFollowing our recent store visits, we view 2Q performance is likely the peak, and LULU's [long-term] projections across revenue, margins, men's, and international are too aggressive,â Konik wrote on Wednesday. âDuring our store visit, we observed brighter colored product offerings on sale (increased fashion risk) as well as a slower men's section, and no interest in the company's footwear or MIRROR offerings.â

He suggested that this dynamic is likely to force the company to consider markdowns, adding to pressure on margins. 
Read more on the companyâs recent earnings result.