Michael Kors (KORS) stock was downgraded to "neutral" from "overweight" at Piper Jaffray earlier today, given steep promotions and a lack of positive catalysts.

The firm's new $48 price target, down from $60, represents about 12% upside from the stock's current level of roughly $43.

"While we believe in the global scale of the Michael Kors brand and note there were some successes over the holiday (All Access smartwatches), the handbag category has remained excessively promotional and we believe it underwhelmed, particularly at wholesale, from a conversion perspective," the analysts wrote in a note.

Michael Kors and Kate Spade (KATE)  have apparently run the deepest discounts on handbags without offering any of the variation that is needed to gain share, the Piper Jaffray analysts claimed.

On Black Friday, Michael Kors ran 25% off $250 and 30% off $300, a bigger sale than last year's $50 off $250, $125 off $500 and $300 off $750. This year's sale lasted longer than last year's as well.

Luxury retailers as a group have become increasingly reliant on promotions to drive sales to price-sensitive customers.

"In North America there has been a very, very strong amount of promotional activities generated from competitors and from certain other channels of distribution," Michael Kors CEO John Idol said in November on the company's fiscal 2017 second quarter earnings call.

He noted that the retailer plans to reduce its promotional activity beginning February 1. 

Michael Kors nonetheless lowered its full-year profit outlook in November. The company expects to report earnings between $4.37 and $4.43 per share for fiscal 2017, down from $4.56 to $4.64 per share previously.

Shares were trading mostly flat early Tuesday afternoon and have risen about 7.5% over the past 12 months.