ASX 200 stock Lovisa Holdings Ltd (ASX: LOV) has sold off sharply in early trade on Thursday. Lovisa shares are currently down 7% at $27.78 after opening in the red and hitting an intraday low of $27.46, down 8.3%.

Zooming out, shares in the fashion jewellery retailer are down almost 9% in the past month of trade.

Whilst there's been nothing price-sensitive posted from Lovisa this morning, several brokers have downgraded the stock, and reports have surfaced about a lawsuit involving its former CEO.

Here's a closer look at the details.

Brokers downgrade ASX 200 stock

While Lovisa shares have been trending lower this past month, several brokers have changed their sentiment on the ASX 200 stock this week.

According to reports by The Australian, investment bank and broker UBS downgraded its rating on Lovisa to sell this week.

Fellow broker Jefferies has followed suit, shifting its recommendation from buy to hold.

As a result, the consensus of analyst estimates now rates the stock a hold as well, down from an average buy rating last week.

It's not all bad news for the fashion jewellery retailer, though. Shares are still up 19% in the past year, and some brokers are bullish.

As my colleague James reported today, broker Morgans is bullish on the stock, and rates it a buy with a $36.50 price target.

Morgans says the ASX 200 stock can "successfully build out its unique brand in many diverse territories" as it becomes a "global brand".

Competitor's CEO faces lawsuit

Reporting has also surfaced today outlining a lawsuit involving former Lovisa and now competing CEO Shane Fallscheer.

Fallscheer now runs rival jewellery chain Harli + Harpa. As reported by The Australian, former Harli + Harpa CEO Cass Fuller has started proceedings against Fallscheer over allegations of wrongful dismissal.

Naturally, the internal rumblings of one company should hardly affect the operations of another.

However, according to analysts at Citi, Harli + Harpa is a meaningful competitor to Lovisa, having opened 18 stores since November last year. As reported by The Aus:

Given Lovisa has 178 stores in Australia (end of FY24) the impact on Lovisa's earnings to date is likely immaterial, however, the rapid pace of openings for Harli + Harpa makes us incrementally more concerned that Lovisa's sales and margins would increasingly be impacted over CY25 and potentially sooner over the remainder of 1H FY25.

ASX 200 stock takeout

This ASX 200 stock has taken a beating today and is down 7% since the opening bell. Some brokers have turned less positive on the company, which might be behind some of the selling.

But zooming out, the stock is in a broader downtrend, having slipped from mid-October's high of $36.19.