Lululemon Stock Soars to Fresh Highs After Strong Q4

Analysts increase price targets

Lululemon Athletica Inc. (LULU) shares rose more than 15% during Thursday's session after the retailer reported strong fourth quarter financial results after the bell on Wednesday. Revenue rose 26% to $1.17 billion, beating consensus estimates by $20 million, and non-GAAP earnings per share reached $1.85, beating consensus estimates by 10 cents per share. Comparable sales also rose 17%, surpassing consensus estimates calling for a 16.6% gain for the quarter.

The company expects to see these growth rates continue over the coming year. In fiscal year 2020, Lululemon anticipates revenue of between $3.7 billion and $3.74 billion, which was higher than consensus estimates of $3.71 billion. Earnings per share are expected to be between $4.48 and $4.55, which compares favorably to the $4.40 consensus estimate.

Analysts were largely bullish on the stock following the earnings report. Oppenheimer and Credit Suisse analysts both increased their price targets to $190, and JPMorgan analysts believe that the stock could move even higher with a price target of $197. However, Jefferies analysts believe that Lululemon shares already reflect much of the upside and remain more cautious.

Technical chart showing the performance of Lululemon Athletica Inc. (LULU)

From a technical standpoint, the stock broke out from multiple resistance levels to fresh all-time highs. The relative strength index (RSI) moved into overbought territory with a reading of 71.95, but the moving average convergence divergence (MACD) experienced a bullish crossover. These indicators suggest that the stock could see some consolidation ahead, but the intermediate-term trend remains bullish.

Traders should watch for some consolidation above prior highs and R2 resistance at around $166.33 over the coming sessions. After some profit taking, the stock could resume its uptrend toward analyst price targets of around $190. If the stock breaks down from support, traders could see a move to reaction highs and R1 resistance at $158.37 or the pivot point at $150.72, although that scenario seems less likely to occur.

The author holds no position in the stock(s) mentioned except through passively managed index funds.

Do you have a news tip for Investopedia reporters? Please email us at
Take the Next Step to Invest
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.