Bank of America Merrill Lynch Maintains Underperform on lululemon athletica

Bank of America Merrill Lynch is out with its report today on lululemon athletica LULU, maintaining Underperform. In its report, Bank of America Merrill Lynch writes, "lululemon reported 2Q EPS of $0.26, $0.04 ahead of our $0.22 estimate. The beat was driven by stronger sales (comps increased 20%) and gross margins than expected. We are increasing our F2011 EPS estimate $0.09, to $1.14 and our F2012 estimate $0.17, to $1.45 to reflect the beat and faster store growth. lulu continues to grow rapidly as new stores and expanding brand awareness drive sales. However, with the stock trading at 38x our F2012 EPS estimates, we continue to see more risk to the downside and retain our Underperform rating." At the time of posting, shares of LULU were trading pre-market at $53.25, down 3.29% from Friday's close.