Jim Cramer -- Lululemon Could Be Setting Up for a Rebound

Shares of Lululemon Athletica (LULU) are down a little less than 1% on Wednesday, after the stock was downgraded to neutral from outperform at Credit Suisse. The analysts assigned a $53 price target. 

There has been a lot of scrutiny surrounding the company's product discounting, and there are concerns over its margins, said TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, on CNBC's "Stop Trading" segment. 

If enough analysts downgrade the stock, then it's likely going to rally even if it reports not-so-good numbers, Cramer predicted.

When enough people turn negative on the stock, he said, it lowers expectations to the point where just-OK results are enough to jump start the stock higher. That very thing could be playing out with Lululemon right now, he added. 

After a robust start to 2016, the stock embarked on a big decline in September, falling from its 52-week highs near $82 in late August to about $56 at its current levels. The 30% decline has certainly been swift. 

At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.

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