Lululemon price target lowered to $400 from $475 at Guggenheim

Guggenheim analyst Robert Drbul lowered the firm’s price target on Lululemon to $400 from $475 and keeps a Buy rating on the shares after the company provided Q4 update in conjunction with its participation in the ICR conference. Noting that Lululemon reported strong traffic trends across both physical and digital channels, the analyst increased his Q4 sales estimate to $2.70B. However, as he now anticipates gross margin at Lululemon to contract 90 bps to 57.2%, he slightly reduces his Q4 EPS estimate to $4.26 from $4.28 prior.