In a report released today, Christopher Nardone from Bank of America Securities reiterated a Buy rating on Ralph Lauren (RL – Research Report), with a price target of $165.00.
Christopher Nardone has given a Buy rating for Ralph Lauren’s stock due to a combination of factors that indicate a strong potential for the company’s share value to increase. He suggests that the consensus estimate for fiscal year 2025 earnings per share (EPS) is on the conservative side, as his forecast is 5% higher. Nardone anticipates Ralph Lauren will continue to make progress towards its fiscal 2025 margin target, which should alleviate concerns about potential margin declines. The valuation of Ralph Lauren at 7.7 times enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) and 12.8 times price to earnings (P/E) is considered reasonable, especially when compared to its historical averages. He also expects that improved clarity on the company’s financial outlook will bolster its current valuation.
Moreover, Nardone emphasizes the company’s ability to adapt its cost structure to achieve the projected 15% constant currency EBIT margin by fiscal 2025. His positive outlook is reinforced by anticipated sales growth, particularly in Asia, and expected improvements in gross margin. In addition, he identifies the North American segment as an area with significant potential for further margin enhancement, especially if there is a recovery in the US wholesale market. Although there are risks, such as the possibility of a pricing unwind or challenges in US and European direct-to-consumer segments, Nardone believes that Ralph Lauren’s high-quality brand positioning and lower relative exposure to these risks make it a stock poised to outperform.
According to TipRanks, Nardone is a 4-star analyst with an average return of 11.1% and a 60.00% success rate. Nardone covers the Consumer Cyclical sector, focusing on stocks such as American Eagle, Carter’s, and Crocs.
In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $176.00 price target.
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Ralph Lauren (RL) Company Description:
Ralph Lauren Corp. engages in the design, marketing and distribution of premium lifestyle products. The firm offers apparel, accessories, home furnishings, and other licensed product. It operates through the following segments: North America, Europe, and Asia. The North America segment consists of sales of Ralph Lauren branded apparel, accessories, home furnishings, and related products made through the Company’s wholesale and retail businesses in the U.S. and Canada, excluding Club Monaco. The Europe segment caters to sales of Ralph Lauren branded apparel, accessories, home furnishings, and related products made through the Company’s wholesale and retail businesses in Europe and the Middle East, excluding Club Monaco. The Asia segment covers the sales of Ralph Lauren branded apparel, accessories, home furnishings, and related products made through the Company’s wholesale and retail businesses in Asia, Australia, and New Zealand. The company was founded by Ralph Lauren in 1967 and is headquartered in New York, NY.
Read More on RL:
- Ralph Lauren price target raised to $140 from $120 at Wells Fargo
- Top consumer names to own in 2024, according to Telsey Advisory
- Ralph Lauren just upgraded at Goldman Sachs, here’s why
- Ralph Lauren CEO Louvet sells $12M in company shares
- Ralph Lauren price target raised to $147 from $142 at TD Cowen
