Lululemon Slips as Citi Warns on Need for ‘Flawless’ Showing

Shares of Lululemon Athletica Inc. dropped after the bell as a Citi analyst cut the athletic clothing maker to a neutral rating from buy, and warned investors of a turbulent year ahead.

After a 71% climb in 2019 before today, Lululemon was trading at over 22.5 times analyst Paul Lejuez’s estimate for next year’s earnings before interest, taxes, depreciation and amortization. Lululemon “has done nearly everything right,” but current valuations indicate “the market expects results to be flawless, leaving little room for disappointment,” he warned.