KeyBanc Downgrades Lululemon Athletica Inc. (LULU) to Underweight; A Leg Down, China in the Bag; Buy Coach (COH)

KeyBanc downgraded Lululemon Athletica Inc. (NASDAQ: LULU) to Underweight with a price target of $38.00.

KeyBanc analyst says, "We think that Coach, Inc. (NYSE: COH) will outperform lululemon athletica over the near to medium term; we adopt a pair trade to BUY on Coach and UNDERWEIGHT on lululemon athletica. We, as many, struggle with our positioning within the current equity market volatility. However, a few lessons recently learned during the 2008 downturn are that the high-end consumer is severely impacted during times of equity market distress. With consumer confidence at a two-year low (63.7 in July, the lowest since March 2009), we tend to see more downside for the high end. Urban Outfitters, Inc.'s (Nasdaq: URBN) negative commentary on recent Anthropologie sales trends elucidates this point."

For more ratings news on Lululemon Athletica Inc. click here and for the rating history of Lululemon Athletica Inc. click here.

Shares of Lululemon Athletica Inc. closed at $48.00 yesterday.

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