Trading Lululemon After Revised Quarterly Guidance
Lululemon Athletica is a Canadian-American athletic apparel retailer. Founded in 1998, the company's IPO (initial public offering) was in July 2007. It has been listed in Fortune's Fastest-Growing Companies list.
Investors focus on apparel retailers at the beginning of the year, as the companies report their sales for the holiday season. Learn more about Lululemon's revised guidance for the fourth quarter of 2023 and what analysts are forecasting for the stock.
|Lululemon Athletica Inc
|Symbol for Invest.MT5 Account:
|Date of Idea:
|9 January 2024
|1 - 6 months
|Position Size for Invest.MT5 Account:
- The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose, as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
Lululemon Revised Guidance
Lululemon revised its guidance higher for its fiscal fourth quarter of 2023. It now expects revenue in the range of $3.17 billion to $3.19 billion. This is higher than its previous guidance of $3.135 billion to $3.17 billion and is a 14% to 15% increase from the same period the prior year.
The retailer's earnings per share for the fiscal fourth quarter of 2023 is now expected in between $4.96 to $5.00 which is higher than its previous guidance and what analysts were expecting. The revised guidance higher shows that Lululemon had an impressive holiday season, with chief financial officer Meghan Frank stating they are pleased with how they performed.
In 2023, Lululemon's share price ended more than 59% higher and recorded a new all-time high. While more analysts have a buy rating on the stock, with some suggesting to hold and even one sell, as seen from the analyst forecasts below, the all-time high price level of $516.00 is around the average price target.
Some analysts believe the stock may have peaked while some say there is still room to grow. For example, in September Lululemon announced a five-year partnership deal with Peloton which will market its clothing items in-store. A key growth area is international expansion as international revenue only accounts for 16% of total revenue. However, there are no announcements of expansion yet and most of the known growth plans are probably priced into the stock already which may limit any upside potential.
Keeping track of Lululemon's growth plans for 2024 is important as it will have a direct impact on whether investors believe more value could be unlocked in its share price. Lululemon's next earnings update is on 26 March 2024.
Lululemon Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for a Lululemon stock forecast in the past 3 months, there are currently 22 buy, 4 hold and 1 sell ratings on the stock. The highest price level for a Lululemon stock forecast is $610.00 with the lowest price target at $408.00.
The average price target for a Lululemon stock forecast is $518.00.
An Example Trading Idea for the Lululemon Stock Price
An example trading idea for the Lululemon share price could be as follows:
- Buy the stock on a break above $518.00 to allow for volatility.
- Target just below the highest analyst price target of $610.00.
- Keep your risk small at a maximum of 5% of your total account.
- Time Line = 1 – 6 months
- If you buy 10 Lululemon shares:
- If target is reached = $920.00 potential profit [($610.00 - $518.00) * 10 shares].
Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering the uncertainty around Lululemon's future plans and investments.
Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.
With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in Lululemon stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.
There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!
How to Buy Lululemon Stock in 4 Steps
With Admirals, you can buy shares in companies like Lululemon with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks.
- Open an account with Admirals to access the dashboard.
- Click on Trade on one of your live or demo accounts to open the web platform.
- Search for your stock in the search window at the top right to view the live price chart.
- Click Create New Order from the bottom of the screen to open the trading ticket.
Click on the banner below to trade Lululemon stock today ▼▼▼
Do You See the Lululemon Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance Lululemon share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
This means you can trade long and short to potentially profit from rising and falling stock prices.
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