Lululemon Warns Q4 Off To A Slow Start


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


Lululemon Athletica inc. (NASDAQ: LULU) reported an earnings beat and $100 million stock buyback after the market close on Wednesday. The stock spiked in after-hours trading before leveling off up around 16 percent at $69.

BMO Bucks Wall Street Trend: Market Perform

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In contrast with the market’s (and other analysts') response, BMO Capital Markets analyst John D. Morris maintains a Market Perform rating, while raising his price target to $65 from $55.

The analyst cited a slow start in November and maintained Q4 guidance from the company as a key supporting point in his thesis.

Moreover, Morris sees the entire athleisure sector as possibly reaching a turning point.

“We remain Market Perform rated based on our view that increased competition in a plateauing athleisure segment may eventually pressure margins above expectations,” said Morris.

Bull And Bear Cases

In his upside scenario, the analyst sees the stock hitting $75 if the new assortment is accepted well and if mall traffic sees dramatic improvement.

In his downside scenario, Morris sees the stock slumping to $50 if mall traffic sees a decline or the newer assortments aren’t well received.

At last check, Lululemon shares were up 16.84 percent on the day, trading at $69.92.


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


Posted In: Analyst ColorEarningsNewsGuidancePrice TargetReiterationAnalyst RatingsMoversApparelapparel retailersAthleisureBMOBMO Capital MarketsJohn D. MorrisJohn Morrisretailretailers