Goldman Sachs has revised its price target for Lululemon (LULU, Financial) shares, reducing it from $363 to $302 while maintaining a Neutral rating. This adjustment comes as the firm adopts a more cautious stance towards the U.S. apparel and softlines sector, prompted by a challenging macroeconomic environment.
The revision in outlook coincides with Goldman Sachs' updated forecast for the U.S. economy. The company's economists have downgraded their U.S. GDP growth projections to 0.5% for 2025, a significant cut from the 2.5% growth anticipated for 2024 on a quarter-to-quarter basis. Additionally, the firm now perceives a 45% chance of a recession, though it is not fully pricing in a recessionary scenario at this time.
This cautious approach is influenced by recent market fluctuations, increasing geopolitical uncertainties, and the impact of elevated tariff rates, all of which could pose risks to corporate earnings. While Goldman Sachs acknowledges these factors, they continue to monitor potential downside risks affecting the financial outlook for Lululemon and the broader sector.
