Credit Suisse downgrades Lululemon on increased markdowns, slashes price target by 30%

Pedestrians pass by a Lululemon store.
Scott Mlyn | CNBC

Credit Suisse on Wednesday downgraded Lululemon to neutral from outperform, slashing its 12-month price target for the athletic clothing manufacturer by 30 percent to $53 from $76 on concerns over earnings growth.

"Our proprietary pricing and inventory analysis suggests markdown intensity has increased for Lululemon this quarter. With an increase in discounting in women's tops particularly, we have less conviction in the company being able to sustain recent topline momentum, which we view as crucial in supporting earnings recapture," wrote equity analyst Christian Buss.

Since reaching a 52-week high of $81.81 in August, shares of Lululemon have dropped by more than 30 percent after posting weaker-than-expected earnings for two consecutive quarters.