NEW YORK (TheStreet) -- Shares of Kate Spade & Co are trading in the red, declining by 0.2% to $30.70 in pre-market trading on Thursday, following a ratings cut to "market perform" from "outperform" by analysts at BMO Capital Markets this morning. Analysts at the investment firm also lowered its price target on shares of the fashion brand to $32 from its previous $48. BMO cited increasing concerns over the retailer's promotional activity in the premium department store channel. Exclusive Report: Jim Cramer's Best Stocks for 2015 STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. New York City-based Kate Spade designs and markets a portfolio of retail-based, premium brands, including Juicy Couture, Kate Spade, and Lucky Brand. Separately, TheStreet Ratings team rates KATE SPADE & CO as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation: "We rate KATE SPADE & CO (KATE) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and premium valuation." Highlights from the analysis by TheStreet Ratings Team goes as follows: Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, KATE SPADE & CO's return on equity significantly exceeds that of both the industry average and the S&P 500. The revenue growth came in higher than the industry average of 17.1%. Since the same quarter one year prior, revenues rose by 30.0%. Growth in the company's revenue appears to have helped boost the earnings per share. The gross profit margin for KATE SPADE & CO is rather high; currently it is at 62.82%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -3.64% is in-line with the industry average. The debt-to-equity ratio is very high at 5.83 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, KATE has a quick ratio of 0.68, this demonstrates the lack of ability of the company to cover short-term liquidity needs. You can view the full analysis from the report here: KATE Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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