Analysts Positive About Ralph Lauren, Market Not Realizing Growth Potential – UBS

Analysts Positive About Ralph Lauren, Market Not Realizing Growth Potential – UBS

Written by Sam Bogda

A BofA Analyst and a UBS Analyst both made bullish research notes on Ralph Lauren (NYSE:) after the company’s analyst day.

The BofA analyst maintained a neutral rating and a price target of $111 per share, seeing better return on risk elsewhere, but were encouraged by the company’s three-year outlook.

β€œImportantly, MGMT reiterated its F23 guidance provided during last month’s first quarter EPS call, a strong message that shows confidence in navigating this environment. We believe that implied F2H expectations this year may be difficult to achieve as the overall pressures do not appear to be going away. (This is reflected in our numbers.) Our F23E EPS of $7.16 is 8% below consensus and makes F25 targets difficult to achieve.However, in a more normalized environment, we expect F25 revenue growth of 6% and operating income growth of 10.5%, or at a loss,” the analyst wrote.

Meanwhile, the UBS analyst maintained a buy rating and a $132 target price on Ralph Lauren. The analyst told investors that they view the stock as a “turnaround idea”.

β€œWe believe the stock will outperform due to EPS outperforming NTM and P/E expansion. In our view, the market does not appreciate the transformational changes the company has made over the past four years and we have greater conviction in this view after RL Analyst Day,” the analyst wrote. “The market also doesn’t realize how much growth potential RL still has. We expect +HSD 5%. EPS CAGR and our FY24 estimate EPS is 4% above consensus. We think the stock is inexpensive.”

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Shares of Ralph Lauren fell more than 2% on Tuesday. Plus, it’s down more than 21% in 2022 as retailers struggle with rising inflation and lower spending.

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