Beat-And-Raise Helps Lululemon Stock Edge Higher

Year-to-date, LULU is down more than 22%

Fernanda Horner

Digital Content Manager

Jun 3, 2022 at 9:24 AM

LULU

Lululemon Athletica Inc (NASDAQ:LULU) is up 1.1% at $305.85 at last check, after the etailer yesterday reported better-than-expected first-quarter earnings, in addition to a revenue beat. What's more, the apparel concern hiked its full-year revenue and profit forecasts, amid strong demand for athleisure clothing and modest impacts from the Covid-19-related lockdowns in China.

Analysts are having mixed reactions to the results, however. The security received at least five price-target cuts this morning, with one coming from BMO to $304 from $344. Meanwhile, both Deutsche Bank and Cowen and Company raised their price objectives to $427 and $505, respectively. The brokerage bunch is mostly optimistic towards LULU, with 15 of the 20 firms in question calling it a "buy" or better.

Lululemon stock has had a volatile 2022 so far. The shares hit a two-year low of $251.51, after the $410 level rejected their late-April rally. And while the security is today pacing for its second-straight daily gain, the 30-day moving average is still acting as a ceiling. Year-to-date, LULU is down 22.7%.

Now could be a good opportunity to bet on Lululemon stock's next move with options. This is per its Schaeffer's Volatility Scorecard (SVS) rating of 98 out of 100. In other words, the equity has tended to outperform options traders' volatility expectations over the last year.

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