Palantir Technologies lifts guidance after Q2 results beat Wall Street estimates
On Thursday, JPMorgan analyst Matthew Boss increased the price target for Ralph Lauren shares, listed on (NYSE:RL), to $355 from the previous target of $342, while maintaining an Overweight rating on the stock. This adjustment reflects a positive outlook on the company’s earnings potential and sustained revenue growth. According to InvestingPro data, seven analysts have recently revised their earnings estimates upward, while the stock trades near its 52-week high of $289.33. Current analysis suggests the stock is trading above its Fair Value.
Boss’s analysis suggests that Ralph Lauren has not experienced any slowdown in global regions through May, continuing the 10% year-on-year revenue growth seen in the fourth quarter into the first quarter. Importantly, the company has reported no cancellations from wholesale partners to date. InvestingPro data shows the company maintains impressive gross profit margins of 68.08% and has achieved a 69.51% price return over the past year, demonstrating strong operational efficiency and market performance.
Despite the robust start to the year, Ralph Lauren’s initial forecast for the second half of fiscal year 2026 includes a conservative estimate of a 10 percentage point moderation in revenue growth. This includes a projected mid-single-digit decline in North America, contrasting with the positive growth observed in the fourth quarter and first quarter to date. For Europe, the company anticipates low-single-digit growth in the second half of 2026, which is lower than the mid-teens constant currency growth seen in the previous quarters. The company’s financial health score from InvestingPro remains "GREAT" at 3.24, supported by strong cash flows and moderate debt levels. Subscribers can access 15+ additional ProTips and comprehensive financial metrics in the Pro Research Report.
On the earnings front, Boss noted that management’s preliminary guide for fiscal year 2026 factors in a headwind of over 100 basis points from tariffs. However, there are potential mitigation actions being evaluated that could provide upside to the current guidance.
The new price target of $355 is based on a 24 times multiple of the calendar year 2026 estimated earnings per share, using a linear margin and top-line profile multiple regression analysis. This approach draws from the fiscal years 2017 to 2019 profiles. Boss also pointed to a potential upside scenario that could push the equity value to over $400.
In other recent news, Ralph Lauren reported strong financial results for the fourth quarter of fiscal year 2025, exceeding Wall Street’s expectations. The company achieved an earnings per share (EPS) of $2.27, surpassing the anticipated $2.04, and reported revenue of $1.7 billion, which was higher than the forecasted $1.64 billion. This performance was driven by a 10% increase in revenue on a constant-FX basis, with significant growth in international markets, particularly in China. Analysts from Needham maintained a "Buy" rating for Ralph Lauren, with a price target of $310, citing the company’s robust financial position and nearly $1 billion in net cash. TD Cowen also expressed optimism, raising the stock price target to $308 and highlighting Ralph Lauren’s impressive two-year stacked comparable sales and strong performance in key categories like handbags and women’s apparel. Looking forward, Ralph Lauren plans for low single-digit revenue growth in fiscal year 2026, with analysts suggesting that the company’s conservative guidance could be revised upward. The company remains focused on product innovation and market expansion, supported by a strong balance sheet and strategic operational adjustments.
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