UPDATE: Deutsche Bank Initiates Coverage on Lululemon Athletica with Hold Rating, $65 PT on Multiple Concerns

In a report published Tuesday, Deutsche Bank analyst Dave Weiner initiated coverage on

with a Hold rating and $65.00 price target. In the report, Deutsche Bank noted, “Despite our view that over time, LULU may develop into a leading global, diversified lifestyle brand, we initiate at Hold given concerns about key mgmt. transitions and still-vulnerable valuation. While the brand has many key levers, including a meaningful comp opportunity on category extensions and a push in to men's product, we believe these are taking a back seat with investors right now. Primarily, we need visibility around forthcoming CEO and ‘chief merchant' hires. $65 PT based on LT EPS growth of 20%-25% & a 130% PE/G, in-line w/3Y avg. Upside if 2Q comps >7%, w/downside as P/E is still lofty (~28x NTM).” Lululemon Athletica closed on Monday at $61.31.