RL - Ralph Lauren stock slips as BMO cuts to Sell

Ralph Lauren Corporation ( NYSE: RL ) stock slid sharply on Friday after BMO reduced its rating to a Sell-equivalent.

The downgrade note explained that a nearly 50% rally for the stock since the start of the calendar fourth quarter has elevated downside risk. Resilient global sales are coming at the expense of margins, according to the bank’s analysis. Meanwhile, North American performance is expected to show deterioration amid supply chain pressures and increased marketing spend.

“Although we believe RL has among the group’s strongest brand/management team, shares are almost back to pandemic-peaks despite lowered results and we worry Asia’s strength masks domestic pressures,” equity analyst Simeon Siegel wrote. “We fear a negatively skewed risk/reward here. We like the brand and management, but are concerned about the shares.”

As such, he cut his rating on the stock to Underperform from Market Perform and assigned it a $100 price target. Shares of the New York-based fashion company fell 4.03% in premarket trading on Friday.

Read more on Barclays’ conversely bullish outlook on Ralph Lauren .

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