LULU Stock Inches Higher After COO Departure

The firm is slated to report its third-quarter earnings after the close tomorrow

Deputy Editor
Dec 10, 2019 at 9:31 AM
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It was announced yesterday evening that the chief operating officer (COO) of athleisure company Lululemon Athletica Inc (NASDAQ:LULU), Stuart Haselden, will be leaving the firm to join privately owned luggage maker Away as its CEO, effective Jan. 10. The stock is up 0.7% at $232.50, at last check.

This announcement comes just ahead of LULU's third-quarter earnings report, scheduled for after the close tomorrow, and analysts are already chiming in, which may be buoying the security this morning. So far, Wedbush lifted its price target to $225 from $190. This puts the consensus 12-month target price right in line with current levels, which could invite even more analyst notes in the coming days. And while 12 of those in coverage consider the yoga pants manufacturer to be a "strong buy," 10 have slapped it with a tepid "hold" rating. 

Historically, earnings season has been a boon for LULU, with seven of its last eight post-earnings sessions yielding positive returns, including a 14.1% pop in March, and a 16.3% surge in June 2018. The security has averaged a next-day swing of 10.3%, regardless of direction, and this time around the options pits are pricing in a post-earnings move of 12.4%. 

Speaking of the options pits, things have rarely been more call-heavy than they are right now. In fact, 1.7 long calls have been bought for every put on the  International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- a ratio that sits higher than 98% of all other readings from the past year. 

This isn't surprising considering LULU's recent charge higher. The security has already added 90% for the year, and just came off an all-time high of $233.53 yesterday, with some help from the ascending 10-day moving average. The shares have been consolidating just south of this level for the week, but are hurtling toward their best year on record. 


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