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On Tuesday, TD Cowen demonstrated confidence in Ralph Lauren (NYSE:RL) by increasing the company’s price target from $258.00 to $268.00, while reiterating a Buy rating on the shares. The adjustment reflects a positive outlook on the company’s recent performance and future prospects. This optimism is supported by Ralph Lauren’s impressive market performance, with the stock delivering a 69.25% return over the past year. According to InvestingPro analysis, the stock currently trades at a P/E ratio of 23, which appears reasonable given its growth trajectory.
The firm’s analysts highlighted Ralph Lauren’s impressive same-store sales growth of 10% in the second fiscal quarter, viewing it as a sign of the company’s growing global momentum and successful customer acquisition strategies. The analysts noted that Ralph Lauren’s marketing, merchandising, and direct-to-consumer execution are on the rise, which is also reflected in the company’s improving financial model, including enhanced EBIT margin, return on invested capital (ROIC), and free cash flow (FCF). InvestingPro data reveals the company maintains an impressive gross profit margin of 67.51% and operates with a moderate level of debt, with strong cash flows sufficiently covering interest payments.
The decision to raise the price target is backed by the belief that Ralph Lauren’s valuation has room for further upside, especially considering the company’s high ROIC within the apparel sector. The new target price is set at 19 times the estimated earnings per share for the fiscal year 2027 and approximately 12 times the enterprise value to EBITDA. For deeper insights into Ralph Lauren’s valuation metrics and growth potential, investors can access comprehensive analysis and 14 additional key tips through InvestingPro’s detailed research reports.
TD Cowen’s analysis suggests that Ralph Lauren’s strong performance metrics and solid financial model position the company well for continued success in the competitive apparel market. The firm’s analysts see Ralph Lauren’s current trajectory as a harbinger of sustained growth and increased shareholder value. This outlook is reinforced by InvestingPro’s Financial Health Score of 3.2 (GREAT), though current trading prices suggest the stock may be trading above its Fair Value.
In other recent news, Ralph Lauren has been the subject of various analyst reports. Guggenheim maintained a Buy rating on Ralph Lauren stock, raising its price target to $285 from $260, emphasizing the company’s significant investment in marketing and advertising. The firm expects sales to grow by approximately 9% and operating margin to expand by around 210 basis points this year. Guggenheim’s earnings per share (EPS) estimates for Ralph Lauren stand at $11.60 for fiscal year 2025 and $13.00 for fiscal year 2026.
Citi research also increased its price target for Ralph Lauren to $255 from $230, maintaining a Neutral rating. The firm anticipates Ralph Lauren’s third-quarter EPS to surpass both the consensus estimate and the company’s own guidance. Citi’s analysts project that Ralph Lauren’s sales will rise by 4.9%, attributing this growth in part to strong direct-to-consumer (DTC) sales globally.
However, Raymond (NSE:RYMD) James revised its stock rating for Ralph Lauren from "Outperform" to "Market Perform" due to concerns about changes in foreign exchange rates. Despite acknowledging the brand’s continued excellence, the analyst pointed to external economic factors that may pose challenges to the company’s financial expectations moving forward.
Jefferies also increased the price target on Ralph Lauren shares to $280 from $245, retaining a Buy rating. The analyst highlighted Ralph Lauren’s strategy of shifting focus towards direct-to-consumer sales and the growing interest from younger consumers as key drivers for the brand’s momentum.
Finally, Argus upgraded Ralph Lauren Corporation stock from Hold to Buy, setting a price target of $250. The firm noted Ralph Lauren’s focus on increasing average unit retail growth, attracting a younger customer base, and reducing costs as strategic moves that have begun to yield results.
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