LULU Stock Is Down Over 50% YTD As Heidi O'neill Takes Over: What Wall Street Wants Fixed First

• Morningstar analyst David Swartz said incoming CEO Heidi O'Neill must address weak demand, including a 20% decline in leggings sales. 
• Telsey, Truist, BofA and JPMorgan all turned cautious on Lululemon, cutting price targets amid weakness in product, international and North American channels. 
• In contrast, Michael Burry views the depressed stock price as an attractive turnaround opportunity.

Lululemon Athletica Inc. (LULU) stock slipped overnight as Wall Street analysts questioned the pace of Lululemon's turnaround, cutting price targets after weak second-quarter (Q2) results and a lowered outlook. Incoming CEO Heidi O'Neill, who takes over on Tuesday, faces pressure to revive product momentum, stabilize international sales and restore investor confidence amid a challenging transition. 

Lululemon Athletica stock edged 0.3% lower overnight Monday, after clocking its worst day in a year on Friday, plunging 17%. 

Heidi O'Neill Takes Over As Lululemon Demand Weakens 

Morningstar analyst David Swartz said Lululemon Athletica is entering a crucial leadership transition with sales weakening across key markets and its latest outlook pointing to a much tougher second half of 2026. The athletic-apparel company is set to welcome O'Neill on Tuesday, giving her an immediate challenge to reverse slowing demand.

Lululemon's second-quarter revenue declined 4% as business in the Americas, which accounts for roughly two-thirds of sales, dropped 8%. International revenue rose 4%, but the overseas business still delivered a 3% same-store sales decline, missing expectations by a wide margin.

According to Swartz, O'Neill will need to address declining demand for some of Lululemon's core products, including leggings, where sales fell 20%. Better products and stronger marketing could help the company return to growth. 

Lululemon Faces Mounting Global Pressures 

Telsey Advisory Group reduced its price target to $110 from $122 while retaining a 'Market Perform' rating. The firm said Lululemon still needs to make broader improvements to its product lineup despite efforts to bring more innovation to its offerings.

Truist took a more bearish stance, cutting its price target to $82 from $94 and maintaining a 'Sell' rating, implying an 18% downside to the stock's last closing price. Analyst Joseph Civello said Lululemon's fiscal 2026 outlook has taken another hit as challenges spread across its international operations. Truist expects some of the company's current problems to last longer than initially anticipated, while the leadership transition adds another layer of uncertainty.

Bank of America lowered its price target to $122 from $140 but kept a 'Neutral' rating. The firm pointed to disappointing results in China and limited improvement in North America as reasons to push back expectations for a recovery. 

JPMorgan analyst Matthew Boss also slashed LULU's price target to $95 from $154 and maintained a Neutral rating, citing a Q2 revenue shortfall and weaker international performance. However, investors like“The Big Short” famed Michael Burry see Lululemon as a potential turnaround bet, arguing that the stock's depressed price already reflects recent weakness and could offer further upside if growth returns. 

LULU Stock: Retail Stance 

On Stocktwits, retail sentiment around the stock remained in 'extremely bullish' territory. 

A user said,“Burry the Past!! New Ceo, New Energy, new hopes. PE at a huge discount!!”

Another user said,“Looking forward to trade this to the upside next week. We hit the bottom and it closed above $100. Im just as excited as the bears to where this could go.”

LULU stock has crashed 51% year-to-date. 

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