CFRA Downgrades Ralph Lauren (RL) to Sell

CFRA analyst Zachary Warring upgraded Ralph Lauren (NYSE: RL) from Hold to Sell with a price target of $171.00 (from $160.00).

The analyst comments "We raise our 12-month price target by $11 to $171, based on 15.5x our FY 26 (Mar.) EPS estimate and in line with the company's five-year average forward P/E multiple of 15.6x, reflecting our view that the company is executing well and is deserving of a mid-teens multiple. We raise our FY 25 and FY 26 by $0.50 to $10.50 and $0.50 to $11.00, respectively. Shares of RL have enjoyed a 40% rally year-to-date, bringing the current forward multiple to 18x analyst estimates for the next 12 months, which is at the high end of the company's three-year range. We also believe analyst expectations for FY 25 and FY 26 are elevated and leave little room for error. We expect continued weakness in North America and do not expect Asia or Europe to continue growing at rates seen in recent quarters. We believe the company will meet its full-year guidance. However, we do not believe that this will be enough to keep shares trading at elevated multiples. Thus, we move to Sell on valuation concerns."

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 $202.13 yesterday.

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