Lululemon stock is the best retailer to own this month, historically
Lululemon Athletica Inc (NASDAQ:LULU) stock was last seen trading at $319.20, brushing off global trade tensions thanks to a price-target hike from TD Cowen to $373 from $370. The shares are testing their 320-day moving average before the retailer's first-quarter report, due out after the close on Thursday, June 5. This pressure could come crashing down soon, however, given LULU summer seasonality.
The athleisure retailer is among the best S&P 500 Index (SPX) stocks to own this month, per Schaeffer's Senior Quantitative Analyst Rocky White. The shares averaged a monthly pop of 9.4% and ended the month higher 80% over the past decade. LULU is also the only retailer on the list.
A comparable move from its current perch would place shares just shy of $350, clearing that aforementioned ceiling. The security would also hit its highest trading level since March and extend its 23% nine-month lead. A round of bull notes could keep tailwinds blowing, as 14 of the 31 firms in coverage call LULU a "hold" or worse.
There's also short squeeze potential. Short interest already fell 8% in the last two reporting periods, yet the 5.94 million shares sold short still make up 5.4% of the stock's available float.
LULU has a positive history of post-earnings reactions, finishing six of its last eight next-day sessions higher, including a 16% gain in December. The security averaged a 9.2% move over the last two years, regardless of direction, and this time around the options pits are pricing in a bigger 13.8% move for Friday's trading.