Freedom recommends buying Lululemon shares with 19% upside potential

The broker’s analysts set a target price of $135 per share, implying upside potential of about 19% from current levels.  Lululemon Athletica (LULU) is a premium-segment manufacturer of athletic apparel and accessories. 

Freedom believes the decline in the stock has created an attractive entry point for investors. Since the beginning of the year, Lululemon shares have lost nearly 50%, and are down more than 75% from their all-time highs, approaching the lowest levels since 2019. At the same time, certain technical indicators point to the shares being significantly oversold. 

In the analysts’ view, the market is undervaluing the company’s fundamentals. Despite deteriorating sales momentum, Lululemon maintains high profitability: net margin for the latest quarter was about 8%, and roughly 13% over the past 12 months. The shares are also trading at a notable discount to the sector: the forward P/E multiple is 10.3 versus an industry average of 23.5.

Another positive factor, the analysts say, is the end of the management crisis. The company announced the appointment of a new CEO and continues to strengthen its management team. Management expects sales to decline in the second quarter, but plans to make up the shortfall for the full year.

Freedom also notes the company’s strong financial position. As of the end of the first quarter of fiscal 2026, Lululemon had $1.51 billion in cash on its balance sheet, with another approximately $600 million available under an unused credit facility. The absence of debt allows the company to continue share buybacks, with about $1 billion remaining under the program.

This is not an individual investment recommendation.