Introduction

According to Raymond James, Ralph Lauren’s revenue growth is predicted to experience a significant boost in the international market share. The firm has initiated the stock with an outperform rating and set a price target of $135 per share. This target suggests a 20% increase from the closing price of $112.24 on Thursday. While the apparel company’s shares have been volatile this year, with only a 6.2% gain, the S&P 500 has risen by 12.8%.

Analysis

Analyst Rick Patel believes that Ralph Lauren is currently undervalued, presenting a lucrative buying opportunity for investors. He notes that the stock has experienced a 7% decline in the last three months, leading to lowered expectations. Additionally, the estimated performance, particularly in North America and Wholesale, indicates a low bar. With a price-to-earnings ratio of approximately 11x, the company’s valuation is seen as attractive. Patel also highlights Ralph Lauren’s focus on cost savings and improving margins as factors driving its growth. Furthermore, the increasing average selling prices and unit volume in international markets, such as Asia, are expected to contribute to the company’s revenue growth.

Conclusion

Over the past few years, Ralph Lauren has worked to strengthen its foundation, enabling growth from a healthier base. This strategy involved enhancing its iconic brand, optimizing its wholesale distribution, bolstering its digital capabilities, and optimizing inventory. According to Raymond James, these efforts position Ralph Lauren for future success.