UPDATE: Wedbush Downgrades Lululemon Athletica to Neutral, Reiterates $75 PT Following Customer Survey

In a report published Friday, Wedbush analyst Betty Chen downgraded the rating on Lululemon Athletica

from Outperform to Neutral, but reiterated the $75.00 price target. In the report, Chen noted, “Following our national survey of 300 LULU customers, we are downgrading shares to NEUTRAL from OUTPERFORM as results suggest: (1) consumer perception of quality erosion, which has not been properly addressed by management, (2) LULU may be losing dominance in yoga apparel as competition gains mindshare, and (3) only ~10% of respondents plan to buy more upon restocking of black luon bottoms, suggesting limited pent up demand in Q2/H2. These issues, combined with the stock exceeding our $75 PT, lead us to move to the sidelines.” Lululemon Athletica closed on Thursday at $76.88.