Ralph Lauren is gaining traction in sales and brand visibility, which could soon boost its stock, according to Raymond James. The investment firm upgraded the apparel maker to outperform from market perform. It also put a $410 price target on shares, implying nearly 7% upside from Monday’s close. “Big picture, our positive RL view reflects: average unit retail durability (driven increasingly by favorable sales mix changes), strong momentum in China (where RL is under-penetrated vs. traditional luxury brands), runway in Europe (RL is under-represented in certain major cities), [earnings before interest and taxes] percentage margin expansion, and its strong management team (great execution even during challenging times),” analyst Rick Patel said Tuesday in a note to clients. RL YTD mountain RL year to date Raymond James expects Ralph Lauren to clock an 8% revenue increase for its fiscal first quarter. That figure is on the higher end of the mid-to-high single digit growth guidance issued by the company. Ralph Lauren is scheduled to report financial results Aug. 6. “We see room for upside from AUR, Europe, North America DTC, and tariffs,” Patel wrote. “Given our favorable checks…we believe RL is poised to beat [on revenue] again.” Channel checks for the fiscal first quarter “were very positive,” the analyst noted. During the period, Ralph Lauren showed signs of boosting its website traffic, mobile app data and Google Trends on a quarter-over-quarter basis. Raymond James’ call falls in line with consensus on the Street. Of the 20 analysts covering Ralph Lauren, 17 have a buy or strong buy rating on the stock, LSEG data shows. Shares have grown roughly 9% year to date.
