Wells Fargo upgrades Lululemon to Overweight, cuts Nike and Under Armour
Wells Fargo raised Lululemon’s price target 10% to $550 and upgraded it to Overweight, while downgrading Nike to Equal Weight with a $125 target and Under Armour to Equal Weight at $18, citing elevated inventories and slower demand. The reshuffle signals a cautious near-term outlook for the apparel sector.
1. Coverage Changes and Price Targets
Wells Fargo moved Lululemon to Overweight and raised its price target by 10% to $550, while assigning Equal Weight ratings to Nike and Under Armour, cutting their targets to $125 and $18 respectively. These adjustments reflect a selective focus on names with stronger growth trajectories.
2. Rationale and Apparel Outlook
Analysts pointed to elevated inventory levels across major retailers and signs of softening consumer spending as drivers for the Nike and Under Armour downgrades. In contrast, Lululemon’s deeper direct-to-consumer penetration and new product rollouts underpinned its upgrade, highlighting divergent prospects within the sector.