Lululemon (LULU): Wall Street Keeps Cutting Targets, But Nobody’s Calling It Cheap Enough to Buy

In September 2026, lululemon athletica inc. (NASDAQ: LULU) reported weaker-than-expected second-quarter fiscal 2026 results, with net revenue falling 4% to $2.4 billion and comparable sales dropping 10% on a constant dollar basis. Management revised full-year revenue guidance to a decline of 5% to 7% and earnings per share to $9.48 to $9.73, down from prior forecasts of flat to down 1% and $10.95 to $11.15.

Shares dropped about 18% in extended trading following the announcement. New CEO Heidi O'Neill was set to begin her role the following week. Despite operational achievements, such as a 20% increase in chase volume and positive trends in away-from-body styles, analysts remain skeptical. Citi maintained a Neutral rating and noted a slightly more favorable risk-reward profile, while Wells Fargo and Morgan Stanley lowered their target prices and kept Underweight and Equal Weight ratings, respectively.

BMO Capital warned of weakening demand and historically strong margins under pressure, while JPMorgan expressed concern over LULU's third-quarter earnings outlook being 60% below consensus. Hedge fund ownership decreased to 51 funds from 61, and short interest stands at 12.78% of float. Despite these challenges, Lululemon's brand and community events continue to draw strong participation.