Key insights
- Lululemon (LULU) is now trading at a lower P/E than Wendy's (WEN), indicating a significant shift in market perception. Following a recent earnings report, numerous analysts downgraded LULU and slashed price targets from $170 to $115. This, coupled with a founder's proxy battle resolution and an upcoming CEO transition, suggests LULU is now viewed as a mature retail stock rather than a growth company, implying potential downside pressure on its equity.
LULU P/E currently is 8.65 while WEN P/E is 8.65. Also, a ton of analysts downgraded their ratings for LULU following their earnings results on Thursday and they also lowered their price targets.
Prior to earnings most ‘respectable’ analysts had a PT of roughly $170 and now their PT is roughly $115. Prior to earnings the stock traded for $125 and it now trades for $115.
In other words, it used to have like 50 % upside and now has 0 % upside.
The company just moved past a heavy proxy battle with founder Chip Wilson (who was granted two board seats in a standstill agreement) alongside an upcoming CEO transition.
It's essentially trading like a mature, legacy retail stock rather than a disruptive growth machine.