Lululemon started the year on a high note, but shares have stumbled in the past few months alongside the broader market. But Citi believes the stock's recent pullback creates an attractive entry point to buy the stock.
On Wednesday the firm upgraded the stock to buy, saying the company's fundamentals remain strong and that the stock has been unfairly punished by the broader market decline.
"In recent months fears of a macro slowdown have taken the winning brands down with the rest of the group, seemingly painting all with the same brush. LULU has been a victim, yet is a story of improving fundamentals and stand-out growth prospects, and now at a much lower price," analyst Paul Lejuez wrote in a note to clients.