UPDATE: Oppenheimer Relaunches Coverage on Lululemon Athletica with Perform Rating, $65 PT on Attractive Growth Story

In a report published Thursday, Oppenheimer analyst Anna Andreeva relaunched coverage on

with a Perform rating and $65.00 price target. In the report, Oppenheimer noted, “With 143 stores in the US and an opportunity to grow internationally, LULU is no doubt one of the more attractive growth stories in retail. At the same time, with last week's CEO resignation, the company is looking to fill two critical roles in the organization (CEO and chief merchant), and lack of visibility around leadership adds a new layer of risk to the story. In addition, fundamentals don't match the multiple, in our view (26x 2014 EPS estimates which could prove to be aggressive) as fashion misses from 1Q13 could persist through 2H13, inventory levels are elevated, and stepped-up quality control investments are pressuring LULU's already high margin structure, making the story more reliant on top line growth. While structurally we see a number of red flags to the story, the shares meaningfully corrected last week (down 21% on the CEO news over a two day period, 7-point multiple compression on 2014 EPS estimates, with half of the float changing hands), and for now, we think risk/return is balanced at these levels.” Lululemon Athletica closed on Wednesday at $64.89.