Analysts Positive on Ralph Lauren, Market Doesn’t Realize Growth Potential – UBS

By Sam Boughedda

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

The BofA analyst maintained a Neutral rating and $111 price target on the stock, as they see a better risk-reward elsewhere, but they were encouraged by the company’s three-year outlook.

“Importantly, mgmt reiterated its F23 guidance provided during the 1Q EPS call last month, a strong message that shows confidence in navigating this environment. We think the implied F2H outlook this year could be tough to achieve given the macro pressures don’t seem to be going away (and this is reflected in our numbers). Our F23E EPS of $7.16 is 8% below consensus and makes the F25 targets challenging to hit. That said, in a more normalized environment, we forecast F25 revenue growth of 6% and operating income growth of 10.5%, or in algo,” wrote the analyst.

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

“We think the stock will outperform due to EPS beats over the NTM and P/E expansion. In our view, the market doesn’t appreciate the transformational changes the company has made over the last four years and we have more conviction in this view post RL’s analyst day,” wrote the analyst. “The market also doesn’t realize how much growth potential RL still has. We forecast a +HSD% 5-yr. EPS CAGR and our FY24 EPS estimate is ~4% above consensus. We think the stock is inexpensive.”

Ralph Lauren shares are down over 2% Tuesday. In addition, it is down over 21% in 2022 as retailers struggle due to soaring inflation and a decline in spending.

[ad_2]

Source link