Bernstein downgraded Lululemon (LULU) to Market Perform from Outperform with a price target of $190, down from $220. While the company’s promotion with American Express is driving a near-term boost, its underlying U.S. trends are worsening and its growth seems contingent on a newness strategy that is six months away and unproven, the analyst tells investors in a research note. Bernstein is losing conviction in the bull thesis for Lululemon without proof points to back the company’s strategy. It cut Lululemon’s Americas estimates and moved to the sidelines pending an uptick in prices or traffic that suggests that the company’s spring newness is resonating.
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