On Thursday, CFRA raised the price target for Ralph Lauren (NYSE:RL) shares to $160 from $150 while maintaining a Hold rating. This adjustment follows the apparel company's reported earnings for the fourth quarter, which exceeded consensus estimates.
Ralph Lauren (NYSE:RL) achieved a normalized earnings per share (EPS) of $1.71, surpassing the expected $0.90 and consensus estimates by $0.04. Revenue figures also beat expectations, coming in at $1.57 billion against the anticipated $1.54 billion.
The company's performance in the quarter was bolstered by sales growth across all regions, with North America, Europe, and Asia witnessing increases of 1.8%, 1.8%, and 1.1% respectively.
The company's adjusted gross margin for the quarter showed significant improvement, expanding by 480 basis points year-over-year to 66.6%. This growth was attributed to a combination of lower freight costs, a favorable mix of sales channels and geographies, and increased product pricing.
Looking ahead, Ralph Lauren has provided guidance for low-single-digit revenue growth and anticipates an expansion of operating margin by 110 basis points at the midpoint. Additionally, the company has declared a 10% hike in its quarterly cash dividend, now at $0.825 per share.
Despite Ralph Lauren's strong execution and the positive results for the past quarter, CFRA believes that the stock's value fully reflects the company's current performance, particularly after a 51% increase in its share price over the past year.
InvestingPro Insights
Following Ralph Lauren's impressive earnings report and CFRA's updated price target, it's worth considering additional insights from InvestingPro. The company boasts a perfect Piotroski Score of 9, indicating strong financial health, and has impressively raised its dividend for 3 consecutive years. With a reported gross profit margin of 65.66% in the last twelve months as of Q3 2024, Ralph Lauren demonstrates its capability to manage costs effectively and sustain profitability.
InvestingPro data further reveals a robust market capitalization of $10.79 billion, coupled with a reasonable P/E ratio of 18.91, which drops to 17.19 when adjusted for the last twelve months as of Q3 2024. This suggests that the company is trading at a fair valuation relative to its earnings growth. Moreover, Ralph Lauren's stock has experienced a large price uptick over the last six months, with a total return of 35.1%, reflecting investor confidence and market momentum.
For those considering an investment in Ralph Lauren, or for current shareholders looking to deepen their analysis, InvestingPro offers additional insights. There are 13 more InvestingPro Tips available, which can help investors make informed decisions about their portfolio. To explore these tips and gain a comprehensive understanding of Ralph Lauren's financials and market position, visit https://www.investing.com/pro/RL. And remember, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing even more value to your investment research.
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