02:36 PM EDT, 06/04/2024 (MT Newswires) -- Lululemon Athletica ( LULU ) may miss fiscal first-quarter earnings expectations on Wednesday, though trends have stabilized and the stock has already absorbed much of the near-term impact, according to Oppenheimer.

The brokerage on Tuesday reiterated its earnings per share target of $2.35 that suggests a 3% year-over-year gain from $2.28 the year earlier. Wall Street is expecting EPS of $2.40, while Lululemon's guidance ranges from $2.35 to $2.40, the report showed.

Oppenheimer is modeling for net revenue growth of 9.8% for the April quarter, which is below the consensus view's 9.9% growth rate but toward the upper-end of management's 9% to 10% guidance.

"While we do not expect an 'all-clear'-type report from (Lululemon), we do anticipate signals suggesting that trends at the brand have largely stabilized, lately," a group of Oppenheimer analysts including Brian Nagel said in a report.

Lululemon's "subdued initial" fiscal 2024 top-line growth guidance of 11% to 12%, which implies a deceleration from 2023's 19% revenue gain, isn't expected to be meaningfully adjusted on Wednesday, according to Nagel. Oppenheimer is guiding for full-year earnings per share of $14.01 on 11.2% revenue growth for the ongoing year, which is below the Street's $14.13 EPS estimate and 11.9% revenue forecast. Lululemon in March guided for full-year EPS in the $14 to $14.20 range.

Oppenheimer has removed the athletic apparel from its "top pick" list but the analysts said the shares are "well positioned" over the intermediate to long-term.

"While a fresh cloud of uncertainty now hangs over (Lululemon), underlying growth dynamics for the brand appear intact, improved innovation and marketing should bolster sales expansion, at least somewhat, nearer-term, and share valuations are tracking at historic troughs," Nagel said.

Shares of Lululemon have dropped more than 35% since the company's last earnings report in March, meaningfully underperforming the S&P 500's 1% decline, the report showed. Oppenheimer reiterated an outperform rating and a $445 12- to 18-month price target on the stock, implying more than 45% upside from current levels.

Price: 307.35, Change: +0.73, Percent Change: +0.24