Lululemon Athletica Inc (NASDAQ:LULU) stock is 2.2% lower to trade at $197.50 at last check, brushing off a price-target hike from J.P. Morgan Securities to $209 from $203. The athleisure company has been locked in a proxy battle since late December, with founder and largest shareholder Chip Wilson now reportedly trying to excise private equity firm Advent.
The shares are headed for their third-straight loss amid sector weakness. LULU carries a 46.7% year-over-year deficit and is slipping below former support at $200, which contained several pullbacks since late December.
Options traders lean firmly bullish, per the security's 50-day put/call volume ratio of 1.78 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than 86% of readings from the last year. An unwinding of this optimism could create additional headwinds for LULU going forward.
Options look affordable, per the equity's Schaeffer's Volatility Index (SVI) of 36% that ranks in the 10th percentile of the last 12 months. It's also worth nothing that LULU's Schaeffer's Volatility Scorecard (SVS) ranks at high 96 out of 100, indicating it has tended to exceed option traders' volatility expectations during the past year.
