Retail company Lululemon (LULU) is set to report its Q1 earnings results on June 5 after the market closes. Analysts are expecting earnings per share to come in at $2.58 on revenue of $2.36 billion. This compares to last year’s figures of $2.54 and $2.21 billion, respectively. Interestingly, LULU has a strong track record when it comes to beating earnings. In fact, it has done so in each of its last 15 quarters. And this trend could continue.
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Indeed, both Piper Sandler and Evercore ISI raised their price targets ahead of earnings. Piper Sandler, led by Anna Andreeva, increased its target from $280 to $315, although it kept a Neutral rating. Nevertheless, based on its research, U.S. sales trends look steady, and new product launches are doing well. As a result, Piper expects the company’s Q2 sales guidance to be around 8% growth with earnings per share of about $3.29.
On the other hand, Evercore ISI is more optimistic. The firm, led by 4.5-star Michael Binetti, raised its price target from $320 to $400 and kept an Outperform rating. The analysts believe that Lululemon’s new product innovation (especially the Align No Line pant) is starting to catch on and could help U.S. store sales turn positive again over the next few quarters. Because of this momentum, the analysts named Lululemon one of their top five stock picks.
What Do Options Traders Anticipate?
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. Indeed, the at-the-money straddle suggests that options traders expect a large 9.45% price move in either direction. This estimate is derived from the $335 strike price, with call options priced at $16.17 and put options at $15.52.
Is LULU Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on LULU stock based on 16 Buys, nine Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average LULU price target of $345.58 per share implies that shares are close to fair value.
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