Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 6 Aug, 24 | LULU | Buy | USD 237.15 | USD 262.5 | USD 282.5 | 21 days | 19.1% |
Data Powered by EOD Historical Data (“EODHD”).
Lululemon Athletica Inc., together with its subsidiaries, designs, distributes, and retails athletic apparel, footwear, and accessories under the lululemon brand for women and men. It offers pants, shorts, tops, and jackets for healthy lifestyle, such as yoga, running, training, and other activities. It also provides fitness-inspired accessories. The company sells its products through a chain of company-operated stores; outlets; interactive workout platform; yoga and fitness studios, university campus retailers, and other partners; license and supply arrangements; and temporary locations, as well as through mobile apps and lululemon.com e-commerce website. It has operations in the United States, Canada, Mainland China, Australia, South Korea, Hong Kong, Japan, New Zealand, Taiwan, Singapore, Malaysia, Macau, Thailand, the Asia Pacific, the United Kingdom, Germany, France, Ireland, Spain, the Netherlands, Sweden, Norway, Switzerland, Europe, the Middle East, and Africa. Lululemon Athletica Inc. was founded in 1998 and is based in Vancouver, Canada.
Higher Liquidity: Current Ratio of 2.72x in Q1 FY25 vs Industry Median of 2.29x
Decreased Cash Cycle: 105.5 Days in Q1 FY25 vs 142.9 Days in Q1 FY24
Lower Profitability: Gross Margin of 57.7% in Q1 FY25 vs Industry Median of 59.0%
Operating Inefficiency: Asset Turnover of 0.32x in Q1 FY25 vs 0.36x in Q1 FY24
Changes in consumer shopping preferences, Manufacturing risk, Highly competitive market, Increasing costs & decreasing selling prices, Inaccuracy in guest demand forecast, Limited operating experience, Limited brand recognition in new international markets, Risks associated with leasing retail and distribution space, etc
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 237.15 | 197.5 | 262.5 | 282.5 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
LULU's stock price is currently hovering near the crucial falling trendline support, which suggests that the stock may be poised for an upside move in the near term. Historically, the price has demonstrated resilience at this level, consistently moving higher. Furthermore, the 14-period Relative Strength Index (RSI) is currently oversold and showing a divergence from the price action, indicating a potential reversal. Additionally, LULU's current price is trading below its 21-day and 50-period simple moving averages, and a potential upward move could occur as the stock attempts to retest these established levels in the near term.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Lululemon athletica inc. (NASDAQ: LULU) at its current market price of USD 237.15 as of Aug 6, 2024 (12:20 pm PDT).
Data Powered by EOD Historical Data (“EODHD”).
Sector: Consumer Cyclical Industry: Apparel Retail
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| LULU Lululemon Athletica Inc. |
-2.7 0.98% | 273.89 | 24.18 | 23.75 | 4.40 | 10.01 | 4.32 | 16.05 |
| IDEXY Industria de Diseno Textil SA ADR |
-0.21 0.72% | 28.96 | 23.88 | 20.96 | 3.85 | 6.91 | 3.52 | 12.70 |
| IDEXF Industria de Diseño Textil S.A |
0.005 0.0086% | 58.00 | 23.78 | 21.19 | 3.85 | 6.99 | 3.62 | 13.04 |
| TJX The TJX Companies Inc |
0.37 0.33% | 113.82 | 25.99 | 22.22 | 1.96 | 15.02 | 2.12 | 17.09 |
| FRCOF Fast Retailing Co. Ltd |
- -% | 350.41 | 36.35 | 37.31 | 0.03 | 6.50 | 0.03 | 0.11 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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