Lululemon Lands Bull Note Ahead of Earnings

LULU stock has moved higher after the last five earnings reports

Managing Editor
Aug 28, 2018 at 10:26 AM
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Lululemon Athletica Inc. (NASDAQ:LULU) stock is moving higher in early trading, after receiving a price-target hike to $154 from $125 at Credit Suisse. The lift represents 11.5% upside from Monday's close, and sits in uncharted territory for LULU. What's more, the positive attention comes just ahead of the yoga retailer's second-quarter earnings release -- slated for after the market close on Thursday, Aug. 30. Lululemon stock is up 0.6% at $138.96, at last check.

On the charts, LULU has been in a long-term uptrend, adding roughly 130% in the past year. The shares enjoyed a post-earnings bull gap on June 1, and after a subsequent pullback and bounce off their 60-day moving average, went on to notch a record peak of $140.41 yesterday. The stock was edging near overbought territory heading into today's trading, per its 14-day Relative Strength Index (RSI) -- which settled last night at 69. 

Meanwhile, near-term traders are more call-heavy than usual toward Lululemon Athletica stock. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.95, which ranks in the low 26th percentile of its annual range.

On the other hand, despite LULU's long-term rally, several analysts remain wary, with 13 of the 29 firms following the apparel name maintaining tepid "hold" ratings. Plus, the consensus 12-month price target of $126.86 is a discount to current levels.

Looking into its earnings history, Lululemon stock has finished higher the day after the last five earnings showings, including a 16.3% surge during the aforementioned June 1 report. Should the firm once again best expectations, a round of upgrades or additional price-target hikes could push LULU to higher highs.

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