Lululemon Stock Lifted by Home Workout Acquisition

The equity is up 71% year-over-year

Digital Content Manager
Jun 30, 2020 at 11:06 AM
facebook X logo linkedin

The shares of Lululemon Athletica Inc (NASDAQ: LULU) are up 4.6% at $308.01 this morning, after the athletic apparel retailer announced late Monday night the acquisition of home fitness company Mirror for $500 million. The move allows Lululemon to cash in on booming demand for home-workout classes and equipment, which was spurred by coronavirus lockdowns. As a result of the incoming acquisition, LULU earned a price-target hike from Cowen and Company to $335 from $311. 

The equity has staged an impressive comeback since dropping to its mid-March, two-year lows near the $128 level, culminating in an all-time-high of $324.76 on June 10. Though the shares pulled back some after that peak, their 40-day moving average contained the damage. Longer-term, LULU now sports a 71% year-over-year lead. 

Analysts were majorly optimistic toward the equity coming into today, with 18 of the 27 in coverage calling it a "buy" or better, and the remaining nine calling it a "hold." Meanwhile, the consensus 12-month price target of $320.42 is only a 3.2% premium to current levels, suggesting there is room for more price-target hikes toward the athleisure retailer.

That sentiment is echoed in the options pits today, where the appetite for calls is high. At last check, over 38,000 calls have changed hands, six times the average intraday amount and over three times the number of puts traded. Leading the charge is the weekly 7/2 320-strike call, followed closely by the 315-strike call contract in the same series, with new positions being opened at each.

What's more, Lululemon stock's Schaeffer's Volatility Scorecard (SVS) sits high at 79 out of 100, showing that the equity has tended to exceed option traders' volatility expectations during the past year, a good thing for option buyers.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI