Lululemon Athletica’s (LULU) stock sell off following indications of slower sales growth is likely overdone, Oppenheimer said Friday in a note to clients.
“We studied carefully trends at LULU and revisited our stance on the story. Our advice: stick with LULU,” said Oppenheimer analysts including Brian Nagel.
The investment firm kept its outperform rating on the company, while cutting the price target to $445 from $540.
“While a fresh cloud of uncertainty now hangs over LULU, underlying growth dynamics for the brand appear intact, improved innovation and marketing should bolster sales expansion, at least somewhat, nearer-term, and share valuations are tracking close to historic troughs,” the analysts said.
The company is still Oppenheimer’s preferred larger cap pick inside the athleisure and sporting goods space, the note said.