On Thursday, CFRA raised its price target on Ralph Lauren (NYSE: ) stock to $160 from $150 while maintaining a hold rating. The revision comes after the apparel company reported fourth-quarter earnings that topped consensus estimates.
Ralph Lauren (NYSE: RL ) normalized earnings per share (EPS) of $1.71, beating the $0.90 estimate and $0.04 above the consensus estimate. The revenue figure also beat expectations, reaching $1.57 billion, compared with expectations of $1.54 billion.
The company’s performance for the quarter benefited from sales growth in all regions, with North America, Europe and Asia growing by 1.8%, 1.8% and 1.1% respectively.
The company’s adjusted gross profit margin improved significantly this quarter, expanding 480 basis points from the same period last year to 66.6%. The growth was attributed to lower freight costs, a favorable mix of sales pipelines and geographies, and improved product pricing.
Looking ahead, Ralph Lauren provided guidance for low-single-digit revenue growth and expected operating margins to expand 110 basis points at the midpoint. In addition, the company also announced a 10% increase in its quarterly cash dividend, which currently stands at $0.825 per share.
Despite Ralph Lauren’s strong execution and positive results last quarter, CFRA believes the stock’s value fully reflects the company’s current performance, especially after its stock price rose 51% over the past year.
Investment Professional Insights
Following Ralph Lauren’s impressive earnings report and CFRA’s updated price target, it’s worth considering additional insights from InvestingPro. The company has a perfect Piotroski score of 9, indicating strong financial health, and has significantly increased its dividend for 3 years in a row. With gross profit margin of 65.66% in the trailing 12 months ended in the third quarter of 2024, Ralph Lauren has demonstrated its ability to effectively manage costs and maintain profitability.
InvestingPro data further shows that the company has a market capitalization of $10.79 billion and a reasonable price-to-earnings ratio of 18.91, which drops to 17.19 after adjusting for the trailing 12 months to the third quarter of 2024. Reasonable relative to its earnings growth. Additionally, shares of Ralph Lauren have experienced significant gains over the past six months, with a total return of 35.1%, reflecting investor confidence and market momentum.
For those considering investing in Ralph Lauren, or existing shareholders wishing to deepen their analysis, InvestingPro provides additional insights. There are also 13 InvestingPro Tips available to help investors make informed decisions about their portfolios. To explore these techniques and gain a full understanding of Ralph Lauren’s financial health and market position, please visit https://www.investing.com/pro/RL. Remember to use the coupon code PRONEWS24 Annual or biennial Pro and Pro+ subscriptions receive an additional 10% discount, providing even more value for your investment research.
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