Deutsche Bank Maintains Hold Rating On Lululemon Despite Better Than Expected Q3 Results

Dave Weiner of Deutsche Bank maintained a Hold rating on shares of

on Friday with a price target raised to $46 from a previous $40. According to Weiner, Lululemon reported a “better than expected” third quarter result on Thursday however, the 9.1 percent reaction in share prices following the print is “overdone.” The analyst points out that the company's fourth quarter guidance “disappoints” as store comps continue being weak and gross margin guidance implies a “substantially” lower performance versus a year ago. “While the quarter perhaps provided investors with the sense that a turnaround is progressing, we remain cautious in the face of still-weak comps and heavy investment spend this year (and possible next year too),” Weiner wrote. Weiner lowered his fourth quarter earnings per share estimates to $0.68 from a previous $0.71 per share but the analyst did raise his full year fiscal 2014 estimates to $1.78 per share from a previous $1.76, reflecting the third quarter beat.