Citi raised LULU to "buy" from "neutral"
Lululemon Athletica Inc (NASDAQ:LULU) is up 9.1% to trade at $168.98 at last check, even as the retail sector struggles amid a slew of store closings in response to the coronavirus. This comes after LULU was upgraded to "buy" from "neutral" by Citi, with the analyst calling the yoga pants retailer a "stand out," commending its balance sheet, and predicting a strong rebound for Lululemon once the worst of the pandemic is over.
Lululemon has been in sell-off mode with the rest of the broader market since it hit its all-time peak of $266.20 on Feb. 20. While LULU has taken a 36% haircut since then, the equity just toppled recent pressure at the $160 region and is still up roughly 11% year-over-year.
Sentiment over LULU has been split. Coming into today, 13 analysts considered the stock a "strong buy" while the other 11 say "hold." Meanwhile, the 12-month consensus target price of $249.57 is still a 49.9% premium to current levels.
Puts are immensely popular in the options pits. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 2.44 puts have been bought for every call in the past 10 days. This ratio sits in the top percentile of its annual range, suggesting the appetite for long puts is much higher than usual.