Update: KeyBanc Upgrades Lululemon Athletica to Buy

A report from KeyBanc upgrades its rating from Underweight to Buy and raises its price target from $38 to $58 on Lululemon Athletica LULU. The report states, “We move from our UNDERWEIGHT rating on lululemon Athletica (LULUNASDAQ) to BUY as we believe higher in-stock levels will drive sustained profit growth in 2012… We had the opportunity to meet with CEO Christine Day and CFO John Currie after the 3Q earnings call. We think that the primary near-term concern surrounds the +77% year-over-year increase in 3Q inventory. However, we actually view this as a positive – LULU has been chronically underinventoried…” LULU closed yesterday at $47.17.