Citi analyst Paul Lejuez maintained a Hold rating on Ralph Lauren (RL – Research Report) today and set a price target of $189.00.
Paul Lejuez has given his Hold rating due to a combination of factors surrounding Ralph Lauren’s financial outlook and market positioning. Despite anticipating a beat in their 4Q earnings per share (EPS) relative to the consensus, Lejuez notes the high expectations already set by the market for Ralph Lauren’s stock. The company’s sales are expected to show a modest increase, and direct-to-consumer (DTC) business is predicted to continue positive comparable sales, albeit with a slight deceleration. In Europe, their performance is believed to align with cautious management expectations, despite concerns raised by peer company comments. The guidance for Fiscal Year 2025 operating margin is expected to be consistent with long-term goals, factoring in the impact of foreign exchange pressures.
Lejuez’s report also reflects adjustments to earnings estimates based on stronger U.S. dollar implications. The guidance for Fiscal Year 2025 is likely to project low single-digit growth, which may be negated by foreign exchange headwinds, leading to a projection of flat to low single-digit sales growth. The operating margin guidance aligns with management’s goals when adjusted for currency fluctuations, yet the consensus estimates appear optimistic. Citi’s credit card data also indicates a slight improvement in the fashion sector during Ralph Lauren’s 4Q, yet this is contrasted by a crowded market, suggesting that significant stock movement may require performance well above the already high bar set by current investor sentiment.
Lejuez covers the Consumer Cyclical sector, focusing on stocks such as Macy’s, Abercrombie Fitch, and Foot Locker. According to TipRanks, Lejuez has an average return of 8.8% and a 57.60% success rate on recommended stocks.
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Ralph Lauren (RL) Company Description:
Ralph Lauren Corp. engages in the design, marketing and distribution of premium lifestyle products. The firm offers apparel, accessories, home furnishings, and other licensed product. It operates through the following segments: North America, Europe, and Asia. The North America segment consists of sales of Ralph Lauren branded apparel, accessories, home furnishings, and related products made through the Company’s wholesale and retail businesses in the U.S. and Canada, excluding Club Monaco. The Europe segment caters to sales of Ralph Lauren branded apparel, accessories, home furnishings, and related products made through the Company’s wholesale and retail businesses in Europe and the Middle East, excluding Club Monaco. The Asia segment covers the sales of Ralph Lauren branded apparel, accessories, home furnishings, and related products made through the Company’s wholesale and retail businesses in Asia, Australia, and New Zealand. The company was founded by Ralph Lauren in 1967 and is headquartered in New York, NY.
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