NEW YORK (AP) — Shares of Signet Jewelers Ltd. declined more than 3 percent on Friday after an analyst downgraded the jewelry company partly because of its stock price.

THE SPARK: Oliver Chen of Citi Investment Research lowered the company's rating to "Neutral" from "Buy." He reaffirmed a $70 price target for the owner of the Kay Jewelers and Jared The Galleria of Jewelry chains.

THE ANALYSIS: Chen said in a client note that Signet is up more than 28 percent since mid-September and has climbed more than 15 percent for the year to date.

While the analyst said he still believes in the company's management, product, marketing and in-store execution, Chen said the near-term risk/reward seems "more fair" in part because consumers may be cautious on spending due to higher payroll taxes.

THE BIG PICTURE: Signet and some other jewelry chains have struggled with a slow sales recovery in the wake of the recession, as many consumers cut back on spending.

The Bermuda-based company said in January that sales during the holidays were strong in the U.S., where it has more than 1,300 stores. Sales declined in the U.K., where Signet owns about 520 stores, but CEO Mike Barnes said trends have improved after the holidays.

SHARE ACTION: Signet Jewelers Ltd.'s stock fell $1.60, or 2.6 percent, to $59.64 in afternoon trading. The shares have traded between $40.74 to $63.98, with the high reached on Feb. 7.