The Best Apparel Retail Stock To Own In June

Share to Facebook Share to Twitter Share to Linkedin Shares of Lululemon Athletica (LULU) are down 0.5% this afternoon, last seen at $305.40 ahead of the athletic apparel retailer’s first-quarter earnings report, due out after the close today. Analysts expect the firm to post earnings of $2.38 on revenue of $2.194 billion, amid worries about slowing sales growth and competition from newer brands like Alo and Vuori. Since the beginning of the year, LULU is one of the worst performers on the S&P 500 (SPX), down 40.5% year-to-date. The equity has struggled especially hard since a mid-March bear gap pushed it below long-term support at its 200-day moving average. What’s more, Lululemon Athletica stock touched a more than 52-week low of $293.03 on May 28 following no less than three price-target cuts, the lowest of which came from Morgan Stanley to $404. Despite this unimpressive technical setup, seasonality suggests some tailwinds may start blowing soon. Daily Chart of LULU with 200-day Moving average Refinitiv Eikon Per data from Schaeffer’s Senior Quantitative Analyst Rocky White, LULU ranks seventh on the list of 25 best performing SPX stocks to own in June, and is the only apparel name on the list. The equity finished the month higher eight times out of 10 over the past decade, with an average 8.9% return. A move of similar magnitude would send the stock above $332.55, its highest level since mid-May. Best S&P 500 Stocks in June (last 10 years) Schaeffer’s Investment Research There are more bullish drivers to consider. The stock’s 14-day relative strength index (RSI) of 23.7 sits firmly in “oversold” territory and could indicate a short-term bounce is looming. Earnings could also kickstart the trend higher. The equity has tended to move higher the day after its earnings report, if the last two years are any indication. Lululemon Athletica stock finished five of its last eight next-day sessions higher — including a 12.7% pop back in March — and averaged a move of 8.9%, regardless of direction. This time around, the options pits are pricing in a bigger-than-usual swing of 15.3%. MORE FOR YOU As Russia s Armored Vehicles Get Worse Ukraine s American Made M 2s Destroy Them Faster Google Slashes Pixel 8 Pro Price In A Major New Promotion Apple Stock Hits $3 Trillion Valuation As AI iPhone Hype Builds Follow me on Twitter. Check out my website. Schaeffer’s Investment Research Following Editorial Standards Print Reprints & Permissions