Investing.com -- Raymond James downgraded Ralph Lauren (NYSE: RL ) to Market Perform from Outperform given the stock’s significant rally and adverse foreign exchange rate changes that could limit upside on earnings expectations.

Brokerage noted Ralph Lauren’s strong brand elevation and execution under robust leadership and strategy, but stock’s 10% jump in one month, 30% over three months, and 83% in the past year, has pushed its valuation beyond Raymond (NSE: RYMD ) James’ $235 price target. Ralph Lauren now trades at 20 times FY26 PE, compared to its historical average of 14x.

Raymond James also lowered its estimates due to the recent strengthening of the U.S. dollar, which is expected to weigh on revenue and earnings.

Though, RJ noted Ralph Lauren’s growth drivers, including average unit retail expansion, direct-to-consumer growth, strong performance in Asia, and an anticipated acceleration in North America. Channel checks for F3Q indicate continued momentum in DTC and online promotions, consistent with F2Q’s earnings beat.

Raymond James emphasized that Ralph Lauren remains a high-quality business within the Softlines sector but noted that intensifying FX headwinds could make it difficult to exceed market expectations. The firm seeks greater conviction on the stock’s upside potential before reconsidering its rating.