Citigroup downgraded RL to "neutral" from "buy"
Ralph Lauren Corp (NYSE:RL) is in focus today, ahead of the company's first-quarter earnings report, due out before the open tomorrow, May 24. Firstly, Citigroup downgraded the stock ahead of the event, adjusting its rating to "neutral" from "buy," with a steep price-target cut to $98 from $140. This downgrade is part of several for the brokerage today, as Citi turns bearish toward the retail sector. RL is seeing a bearish options surge as well, as the shares fall to a 17-month low.
Down 2.8% to trade at $90.58 at last check, the stock earlier dropped as low as $88.06 -- its lowest level since December 2020. Year-to-date, the equity is down 23.9%.
So far, 15,000 puts have crossed the tape today -- 56 times the intraday average -- compared to just 2,486 calls. The June 75 put is the most popular, with new positions being bought to open there.
Looking at RL's earnings history, the stock finished five of its last eight next-day sessions lower, including a 9.7% drop in November 2021. This time around, the options pits are pricing in a post-earnings swing of 15.1%, regardless of direction, which is much larger than the 4.9% move the stock has averaged over the last two years.