I am assigning Lululemon Athletica (NASDAQ: LULU) a negative risk/reward rating based on a heightened risk of disappointing earnings growth in 2022, with the caveat that the recent fundamental and technical backdrop is bullish. In this article I breakdown Lululemon’s segment sales to illuminate the source of potential disappointment in 2022. I then place the company’s performance in the context of its valuation, competitive backdrop, and technical setup. The objective is to formulate an investment strategy for the shares as the company is still early in its secular growth story.
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