UPDATE: Sterne Agee Downgrades Lululemon Athletica to Underperform, Lowers PT as Current Valuation is Not Sustainable

In a report published Thursday, Sterne Agee analyst Sam Poser downgraded the rating on

from Neutral to Underperform, and lowered the price target from $75.00 to $56.00. In the report, Sterne Agee noted, “Downgrading to Underperform: The current valuation of over 27X 2014E is not sustainable as the company is alienating the customer. Recent comments from LULU's Chairman/founder, on top of shear and pilling problems, and the ongoing search for a new CEO lead us to the aforementioned conclusion. We see little risk to current trends but expect SSS deceleration in '14. Lowering 2014 EPS and SSS estimates from $2.49 and +8.2% to $2.33 and +6%. We are establishing a $56 PT.” Lululemon Athletica closed on Wednesday at $68.98.