UPDATE: Goldman Sachs Adds Ralph Lauren (RL) to Conviction Buy List

(Updated - October 7, 2016 8:47 AM EDT)

Goldman Sachs upgraded Ralph Lauren (NYSE: RL) from Buy to Conviction Buy with a price target of $120, implying potential return of 18%. Analyst Lindsay Drucker Mann expects to see results from the company's turnaround.

The analyst explained, "As CEO Stefan Larsson approaches his 1-year anniversary at the helm, we believe the foundational elements for a successful turnaround are in place. These include: (1) a major inventory drawdown – we model US wholesale shipments down ~20% over the next 4 quarters, (2) a major push to upgrade operating capabilities including faster speed-to-market and reduced SKU complexity, and (3) a kitty of cost savings from restructuring activities to cushion the bottom-line. In our view, sales targets look reasonable and margin targets look beatable. Our $120, 12-month PT applies 20X fwd P/E; we expect sentiment to improve as turnaround efforts gain credibility."

For an analyst ratings summary and ratings history on Ralph Lauren click here. For more ratings news on Ralph Lauren click here.

Shares of Ralph Lauren closed at $101.41 yesterday.

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