Shares of Lululemon Athletica Inc. plunged 19% in premarket trade Thursday, as a disappointing fiscal fourth-quarter report and outlook prompted multiple downgrades and price target cuts. The selloff puts the yoga gear seller's stock on track to open at the lowest level since January 2016, and to suffer its biggest one-day percentage loss since December 2008. Analyst Ike Boruchow at Wells Fargo cut his rating to market perform, after being at outperform since January 2016, and cut his stock valuation range to $49 to $50 from $78 to $80. Boruchow said he was particularly surprised by the "significant erosion" anticipated in the ecommerce business. "Slowing sales and moderating [gross margins] puts bull thesis on the mat," Boruchow wrote in a note to clients. Susquehanna analyst Sam Poser downgraded the stock to neutral from positive and slashed his price target to $57 from $82, citing weak sales trends and limited visibility on a recovery. Of the 36 analysts surveyed by FactSet, no less than half have cut stock price targets. The stock had gained 2% year to date through Wednesday, while the S&P 500 had tacked on 5.5%.
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