By Peet Serfontein & Khumbulani Kunene
We initiate a long position with a target price of $388.00 and a stop-loss of $280.00 (risk/reward ratio 1:2.5).
Lululemon Athletica designs and retails high-quality athletic clothing products, serving customers worldwide. The company produces fitness pants, shorts, tops and jackets for yoga, dance, running, and general fitness designed with proprietary fabrics that prioritise comfort and functionality.
Founded in 1998, Lululemon Athletica has more than 711 physical stores and has expanded its footprint across North America and globally, with a growing e-commerce presence and an emphasis on community-driven brand engagement through in-store events and fitness classes.
Technically, a price in a developing megaphone pattern presents a promising investment opportunity for the stock (see the insert on the main chart, as well as the notation). This pattern presents a compelling buying opportunity for the stock. The price is past leg four and approaching the lower support boundary. This pattern is often seen in periods of heightened uncertainty or before significant market moves and the start of leg five is supportive to the bullish case, particularly when confirmed by momentum indicators.
A recent bounce from the lower two standard deviation channel pattern also supports the bullish case for the stock. The linear regression channel, which captures the price trend and its typical deviation from the mean, often highlights statistically significant support and resistance zones. When the stock rebounds from the lower boundary it suggests that the price may have become temporarily oversold and signals a shift in momentum as market participants recognise value at depressed levels and initiate buying interest, further supporting a bullish case.
Fading downside price momentum per the MACD histogram, as well as the recent upward trajectory of the on-balance volume (OBV) indicator, supports our bullish view.
| Share Information | |
|---|---|
| Share Code | LULU |
| Industry | Consumer Durables & Apparel |
| Market Capital (USD) | 37.3 billion |
| One Year Total Return | -11.85% |
| Return Year-to-Date | -18.78% |
| Current Price (USD) | 310.61 |
| 52 Week High (USD) | 423.32 |
| 52 Week Low (USD) | 226.01 |
| Financial Year End | February |
| The price action is testing its 200-day simple moving average (SMA) from below. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY25 | FY26E | FY27E | FY28E | |
| Headline Earnings per Share (USD) | 14.64 | 14.92 | 16.02 | 17.45 |
| Growth (%) | 1.91 | 7.39 | 8.93 | |
| Dividend Per Share (USD) | 0 | 0 | 0 | 0 |
| Growth (%) | - | - | - | |
| Forward PE (times) | 20.39 | 18.90 | 17.80 | |
| Forward Dividend Yield (%) | 0 | 0 | 0 | |
| Medium-term growth prospects remain positive for the group, with momentum expected to improve over the next few financial periods. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view
| Share Name and Position | DECK US - Buy (Continue to hold) |
SW US - Buy (Continue to hold) |
PANW US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 109.15 | 39.56 | 173.55 |
| Current | 129.37 | 45.98 | 192.00 |
| Movement | +18.5% | +16.2% | +10.6% |
|
A trough that is developing according to the Elliott Wave theory remains of interest. Remains below its 200-day SMA. Fading downside price momentum is supportive.
Our profit target remains at $144.00 with a trailing stop-loss at $115.00. Exit the trade by 24 June 2025. |
A trough in the Elliott wave theory remains of interest. Remains below its 200-day SMA. Fading downside price momentum is supportive.
Our profit target remains at $49.00 with a trailing stop-loss at $42.00. Exit the trade around 20 August 2025. |
The recent trough in the stock's price continues to attract attention. It remains positioned above its 200-day SMA. The start of upside price momentum is supportive.
Our profit target remains at $228.00 with a trailing stop-loss at $168.00. Exit the trade around 25 June 2025. |
| Share Name and Position | CTAS - Buy (Continue to hold) |
|---|---|
| Entry | 205.84 |
| Current | 215.33 |
| Movement | +4.6% |
|
A bullish pennant pattern continues to attract attention. Remains above its 200-day SMA. Strong upside price momentum is supportive.
Our profit target remains at $241.00 with a trailing stop-loss at $201.00. Exit the trade by 25 June 2025. |
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