11:07 AM EST, 11/26/2024 (MT Newswires) -- Lululemon Athletica ( LULU ) is expected to report a slight beat for its fiscal Q3 earnings and reiterate its full-year outlook, Morgan Stanley said Tuesday.

The athletic apparel and footwear company is scheduled to report fiscal Q3 results Dec. 5. Morgan Stanley reduced its per-share earnings outlook by $0.06 to $2.72, compared with Wall Street's $2.68 view.

"This reflects [roughly] in-line 3Q sales & SG&A assumptions, but a more robust GM forecast," the report said. "Big picture, with the bull/bear debate spanning multiple line items, we think investor focus areas go beyond NA revenue/comp trends this quarter."

The firm increased its fiscal Q4 EPS estimate for Lululemon by $0.07 to $5.64, citing "more optimistic" gross margin assumptions than previously.

"To us, LULU stands out positively as one of few in our softlines retail coverage where we see limited '25e EPS risk (for now), though we acknowledge topline concerns underpinning the bear thesis are valid," the report said.

Morgan Stanley raised its price target on the Lululemon stock to $345 from $314 while maintaining its overweight rating.

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