How Lululemon is Starting the Holiday Shopping Season

Analysts and options traders are targeting the equity in response

Deputy Editor
Dec 8, 2023 at 10:15 AM
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Lululemon Athletica Inc (NASDAQ:LULU) is starting the holiday shopping season off on the right foot, with strong third-quarter demand helping the company turn in a revenue beat. The athleisure retailer's shares are brushing off a lukewarm fourth-quarter outlook, last seen 1.2% higher at $470.44. 

The equity's usually quiet options pits are exploding with activity in response to the event. Within the first hour of trading, more than 31,000 calls and 27,000 puts have already crossed the tape, with the total volume equating to 14 times the amount typically seen at this point. The weekly 12/8 465-strike call is the most popular, followed by the 470-strike call from the same weekly series, with new positions opening at both contracts.

Analysts are in a frenzy, too. Lululemon Athletica stock has received at 14 nine price-target hikes so far. The brokerage bunch covering LULU is also optimistic, with 22 of the 27 firms in question calling it a "buy" or better, coming into today. 

On the charts, the equity is at more than two-year highs. LULU's 10-day moving averaged helped it move higher over the last two months, with the equity on track to log a six-week winning streak. Year to date, Lululemon Athletica stock is up nearly 45%.


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