Has Lululemon (LULU) Outpaced Other Consumer Discretionary Stocks This Year?
For those looking to find strong Consumer Discretionary stocks, it is prudent to search for companies in the group that are outperforming their peers. Lululemon (LULU) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Consumer Discretionary sector should help us answer this question.
Lululemon is one of 274 individual stocks in the Consumer Discretionary sector. Collectively, these companies sit at #10 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.
The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. Lululemon is currently sporting a Zacks Rank of #2 (Buy).
The Zacks Consensus Estimate for LULU's full-year earnings has moved 7.3% higher within the past quarter. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.
Based on the latest available data, LULU has gained about 30.6% so far this year. At the same time, Consumer Discretionary stocks have lost an average of 11.3%. This means that Lululemon is performing better than its sector in terms of year-to-date returns.
One other Consumer Discretionary stock that has outperformed the sector so far this year is OneWater Marine (ONEW). The stock is up 75.9% year-to-date.
In OneWater Marine's case, the consensus EPS estimate for the current year increased 12.9% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).
Looking more specifically, Lululemon belongs to the Textile - Apparel industry, a group that includes 22 individual stocks and currently sits at #42 in the Zacks Industry Rank. On average, this group has gained an average of 19.2% so far this year, meaning that LULU is performing better in terms of year-to-date returns.
OneWater Marine, however, belongs to the Leisure and Recreation Products industry. Currently, this 21-stock industry is ranked #64. The industry has moved -36.6% so far this year.
Lululemon and OneWater Marine could continue their solid performance, so investors interested in Consumer Discretionary stocks should continue to pay close attention to these stocks.
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