By Michael Elkins
Bank of America upgraded Ralph Lauren (NYSE: RL ) to a Buy rating (from Neutral) and raised their price target on the stock to $145.00 (from $130.00) as the retailer’s strong revenue trends boost confidence. Bank of America increased F23E/F24E EPS by 6%/10% to $8.06/$9.50 to reflect the 3Q beat and improved operating margin forecasts.
Over the last several years, the company’s management has overhauled its North America franchise to improve the long-term profitability of the business by reducing the number of dilutive, lower quality partners and leaning more into DTC. Analysts expect management’s efforts to be a key differentiator compared to other vendors this year as retail brands continue to navigate a promotional retail environment.
They wrote in a note, “We think management has baked in an appropriate level of cautiousness on the US value channel and European wholesale into its outlook and have confidence that the company remains on track to hit its medium-term operating margin target of 15% ccy by F25.”
Shares of RL are up 2.14% in pre-market trading on Monday.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.