LULU Stock Plummets To Over 6-Year Lows – Barclays Says New CEO Appointment Is Incrementally Positive

• Guggenheim said Lululemon remains a strong but overstretched brand.
• Needham said any appointment other than Jane Nielsen was likely to put pressure on the stock.
• Earlier, Michael Burry said he is still holding his position, viewing the stock as a long-term “patience trade.”

Shares of Lululemon Athletica (LULU) plunged 13% to their lowest level in over six years on Thursday, as investors reacted negatively to the appointment of Heidi O’Neill as CEO, despite broadly bullish analyst commentary.

Lululemon said on Wednesday that O’Neill will officially take over as CEO on September 8, bringing over three decades of experience in sportswear, footwear, and performance apparel.

Barclays Says Impact Of O’Neill’s Tenure Likely To Be Seen From 2027

According to TheFly, Barclays said the appointment of Heidi O’Neill is “incremental positive to drive positive change,” adding that the impact of her tenure will likely be seen only from 2027, given her September start date.

The brokerage expects 2026 to be a reset year as the company works through several structural challenges, which could take time to resolve. As a result, the firm remained cautious in the near term and maintained an ‘Equal Weight’ rating with a $161 price target.

Guggenheim said Lululemon “remains a strong but overstretched brand” and believes that a much-needed revenue reset could put more pressure on profits than deliver cost savings. The firm maintained a ‘Neutral’ rating without a price target.

Meanwhile, Michael Burry said he is still holding his position, viewing the stock as a long-term “patience trade.” 

Needham’s Take

Needham & Company maintained a ‘Hold’ rating, noting that activist Elliott Management had reportedly supported Jane Nielsen for the CEO role. Given her strong reputation on Wall Street, the firm said any alternative appointment was always likely to put pressure on the stock.

While Needham described O’Neill as an “intriguing” pick with strong experience in the athletic sector, it cautioned that investors could view the appointment “with a healthy dose of skepticism.” 

How Did Retail Traders React?

Despite the sharp intraday decline, retail sentiment on Stocktwits for LULU shifted to ‘extremely bullish’ from ‘bearish’ a day earlier, amid ‘extremely high’ message volumes.

One user called the selloff “overblown,” saying the CEO has “lots of experience on what not to do.”

However, another user urged investors to stay away from the “value trap,” adding that the stock could continue falling for several years.

The stock has declined more than 30% so far this year.

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