On Thursday, TD Cowen adjusted its price target on shares of Ralph Lauren (NYSE:RL), increasing it to $197.00 from the previous $192.00, while reiterating a Buy rating on the stock. The firm highlighted Ralph Lauren as a top pick, noting that the recent -12% decline in the company's share price since hitting a decade peak on March 21 is seen as an opportune moment for investors to purchase shares.
The recommendation comes after a period of strong performance for the fashion giant, which TD Cowen believes is set to continue. The firm predicts a 14% compound annual growth rate (CAGR) in earnings per share (EPS) into fiscal year 2027. This optimism is based on what the firm perceives as Ralph Lauren's accelerated global momentum.
TD Cowen's outlook further suggests that the market consensus for same-store sales (SSS) and gross margin forecasts into fiscal year 2025 may be undervaluing the company's potential. Their stance is backed by Ralph Lauren's performance as it exited the fourth quarter, which the firm indicates has been robust.
The firm's analysis points to a strong trajectory for Ralph Lauren, citing the brand's ability to maintain momentum and exceed market expectations. The upgrade in the price target reflects confidence in the company's future financial performance and market position.
InvestingPro Insights
As Ralph Lauren (NYSE:RL) garners attention with TD Cowen's revised price target and optimistic growth projections, InvestingPro metrics offer additional context for investors. With a market capitalization of $10.7 billion and a P/E ratio standing at 18.65, the company presents a noteworthy investment profile. The adjusted P/E ratio for the last twelve months as of Q3 2024 at 16.95 suggests a potential undervaluation relative to near-term earnings growth, aligning with TD Cowen's positive stance.
The company's gross profit margins are particularly impressive at 65.66%, which may signal operational efficiency and a strong pricing power in the market. This is complemented by a robust six-month price total return of 42.98%, indicating a significant appreciation in share value over a relatively short period. The InvestingPro Tips also highlight Ralph Lauren's ability to maintain dividend payments for 22 consecutive years, with a current dividend yield of 1.82%, and a record of raising dividends for the past 3 years, reflecting financial stability and commitment to shareholder returns.
For investors seeking more nuanced insights, there are additional InvestingPro Tips available that delve deeper into Ralph Lauren's financial health and market potential. By using the coupon code PRONEWS24, investors can gain an extra 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable tips. Currently, there are 13 more tips available on InvestingPro that could further inform investment decisions and provide a comprehensive understanding of Ralph Lauren's market position.
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