UPDATE: Macquarie Downgrades Lululemon Athletica

Macquarie downgraded Lululemon Athletica inc. LULU in a report issued Wednesday from Neutral to Underperform and reduced the price target from $40 to $34.

Analysts led by Laurent Vasilescu and Stephanie Wakeham noted "that the company needs to meaningfully ramp up international, R&D and marketing investments in order to compete on a global scale."

Vasilesu believed that the company "lost ~$40 million when it entered the U.S. Now it is expanding to Asia and Europe. Assuming incremental SG&A of $28 million, we model LULU’s overseas plans could impact consensus FY 2015 EPS by $0.13."

The report concluded that a "FY 2015E EPS multiple of 19x is in line with the sportswear median multiple. We set FY 2015-16E EPS at $1.75 and $1.77, and roll forward estimates to include FY 2017 and FY 2018."

Lululemon Athletica recently traded at $39.76, up 0.40 percent.