11:24 AM EDT, 05/28/2025 (MT Newswires) -- Lululemon Athletica ( LULU ) could deliver fiscal Q1 EPS upside and reaffirm full year guidance against market expectations of a cut, Morgan Stanley said in an earnings preview on Wednesday.

"We anticipate sales-driven 1Q25 EPS upside, & for Americas sales/comp to be better-than-expected," the note said. The Q1 results are due June 5.

Strong comparable sales in the Americas region will give near-term credibility to the company's strategic focus on improving newness levels, the report said.

"If our 1Q forecast comes to fruition, we would view the result as a step in the right direction, though admit it likely wouldn't quell lingering concerns that LULU stock is moving closer to standard "Specialty Retail" growth/multiple territory," it said.

Morgan Stanley cut its price target on the stock to $346 from $373 while keeping its overweight rating.

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