UBS Raises Price Target on Ralph Lauren (RL) to $117; Reiterates Buy
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UBS reiterated a Buy rating on Ralph Lauren (NYSE: RL), and raised the price target to $117.00 (from $115.00), following the company's 1Q earnings report. RL delivered revenues in line with its –MSD% guidance, and guided 2Q revenues to –M/HSD% above consensus at -10%.
Analyst Michael Binetti commented, "F1Q was the first sign that RL’s new strategy can deliver significant business structure improvements, and that stock pressure from years of negative consensus revisions is abating. On supply chain, RL gave enough detail to boost our conviction that new mgmt has identified the biggest issues: 1) RL reduced its SKU count by double digits at its biggest brands; 2) Reducing lead time to 9 months from 15 (50% of SKUs will be at 9-mo lead time by FY17, 90% by FY18): 3) Launching a new "8 week test program" to more quickly scale impactful new products (Fall '17); 4) Strategic suppliers are already driving improved quality, cost, & speed. Importantly, RL delivered F1Q revenues in line with its –MSD% guidance (-4% YOY), guided 2Q revs to –M/HSD% (above consensus at -10%/UBSe at -9%), and maintained guide for 10% EBIT margins in FY17 despite ongoing negative commentary in its primary US dept store channel in recent weeks."
Shares of Ralph Lauren closed at $103.14 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
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