UPDATE: Nomura Reiterates Buy Rating, Raises PT on Lululemon Athletica on Preliminary 4Q14 Comp Results

In a report published Wednesday, Nomura analyst Robert Drbul reiterated a Buy rating on

, and raised the price target from $63.00 to $70.00. In the report, Nomura noted, “This morning, lululemon reported preliminary 4Q14 comp results well ahead of our and consensus estimates. The company also shared color on the quarter and growth strategies at its ICR XChange presentation. We now expect a total constant-dollar comp sales increase of 6% to 7%, vs our previous expectation for a 4.5% blended comp increase. The company's international strategy remains intact with plans for 25 stores in both Asia and Europe until the regions are breakeven (similar to the company's entrance into Australia). Although management noted fewer markdowns this year vs Holiday last year, we continue to expect ~150bp of gross margin contraction in 4Q driven by mix, product and supply chain expenses, and store occupancy and depreciation. We are very encouraged by today's report and the growth prospects ahead for LULU.” Lululemon Athletica closed on Tuesday at $63.06.