Wells Fargo Starts Polo Ralph Lauren (RL) at Outperform, Expects Double Digit Growth Out of Asia and Europe
Tweet
Share
E-mailGet Alerts RL Hot Sheet
Price: $388.92 +0.39%
Rating Summary:
24 Buy, 12 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
24 Buy, 12 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Join SI Premium – FREE
Wells Fargo initiates coverage on shares of Polo Ralph Lauren (NYSE: RL) with an Outperform rating and a $138-$145 valuation range.
The firm believes that the company's recent investments and expansion will result in double digit sales growth and margin expansion over the next few quarters.
With the company being in its early stage of growth in Asia, Wells Fargo believes that it is better positioned than many to pass through cost increases given its premium positioning. Forecasts a 20 percent compound annual growth rate and expects sales to reach $5 billion in ten years. Due to a new brand and category introductions, store growth, and expansion into Eastern Europe, the firm sees double digit growth in Europe as well.
The company plans to increase its prices on the fall line-up, Wells Fargo does not believe consumers will trade down and be affected by these price increases.
An analyst at Wells Fargo comments, "We think that RL is increasingly positioned as a global luxury goods company and less as a U.S. department store sportswear brand. The company is in the early stages of its growth in Asia, a region that should become increasingly important given the growing demand for luxury, especially from the Chinese consumer. RL also has the opportunity to grow its non-apparel business, especially in accessories, which carry high margin. We believe that these initiatives could drive double-digit sales growth for RL over the next several years and operating margin expansion."
For more ratings news on Polo Ralph Lauren click here and for the rating history of Polo Ralph Lauren click here.
Shares of Polo Ralph Lauren closed at $127.83 yesterday.
The firm believes that the company's recent investments and expansion will result in double digit sales growth and margin expansion over the next few quarters.
With the company being in its early stage of growth in Asia, Wells Fargo believes that it is better positioned than many to pass through cost increases given its premium positioning. Forecasts a 20 percent compound annual growth rate and expects sales to reach $5 billion in ten years. Due to a new brand and category introductions, store growth, and expansion into Eastern Europe, the firm sees double digit growth in Europe as well.
The company plans to increase its prices on the fall line-up, Wells Fargo does not believe consumers will trade down and be affected by these price increases.
An analyst at Wells Fargo comments, "We think that RL is increasingly positioned as a global luxury goods company and less as a U.S. department store sportswear brand. The company is in the early stages of its growth in Asia, a region that should become increasingly important given the growing demand for luxury, especially from the Chinese consumer. RL also has the opportunity to grow its non-apparel business, especially in accessories, which carry high margin. We believe that these initiatives could drive double-digit sales growth for RL over the next several years and operating margin expansion."
For more ratings news on Polo Ralph Lauren click here and for the rating history of Polo Ralph Lauren click here.
Shares of Polo Ralph Lauren closed at $127.83 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- AMD (AMD) to offer senior notes in four parts
- RBC Capital Starts Krystal Biotech (KRYS) at Outperform
- Wells Fargo Downgrades Roku Inc. (ROKU) to Equal Weight
Create E-mail Alert Related Categories
New CoverageRelated Entities
Raising Prices, Wells FargoSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
