Ralph Lauren Soars: Strong Earnings Fuel Stock Surge
A Year of Distinction for Ralph Lauren Corporation
New York’s Ralph Lauren Corporation (RL) is known for designing, marketing, and distributing premium lifestyle products. With a market capitalization of $13.2 billion, the company features a diverse catalog including apparel, footwear, accessories, and home furnishings.
Remarkable Stock Performance Against Market
Over the past 52 weeks, Ralph Lauren’s stock has significantly outperformed the broader market. Having rallied nearly 76.7%, it stands in stark contrast to the S&P 500 Index ($SPX), which has gained just 31.3%. Year-to-date, RL shares are up an impressive 52.6%, compared to SPX’s return of only 25.5%.
Comparison Against Sector Competitors
Ralph Lauren’s strong performance is even more pronounced when compared to the Consumer Discretionary Select Sector SPDR Fund (XLY), which shows a gain of 31% over the same period and a YTD return of 23.2%.
Positive Q2 Earnings Results
On November 7, shares of Ralph Lauren jumped 6.6% following the company’s robust Q2 earnings report. The adjusted earnings of $2.54 per share exceeded the consensus estimates of $2.43 and increased by 21% from the previous year. Total revenue also experienced growth, increasing 6% annually to $1.73 billion, surpassing Wall Street’s expectations of $1.67 billion. Significant growth was noted across all regions, attributed to brand strength, effective pricing strategies, and strategic investments. The expansion of adjusted gross and operating margins, along with revised projections for full-year 2025 revenue and operating margins, likely enhanced investor confidence.
Encouraging Future Projections
Analysts predict that RL’s earnings per share (EPS) will grow by 13.6% year-over-year, reaching $11.71 for the current fiscal year, which ends in March 2025. Notably, the company has a strong history of exceeding earnings targets, having outperformed consensus estimates in the last four quarters.
Analysts’ Consensus Rating
A survey of 16 analysts covering Ralph Lauren shows a consensus rating of “Moderate Buy,” which is drawn from 10 ratings of “Strong Buy,” one “Moderate Buy,” four “Hold,” and one “Strong Sell.”
Price Target Adjustments
On November 8, Telsey Advisory reaffirmed an “Outperform” rating for RL and raised its price target to $247, suggesting a 12.3% potential increase from current levels. The average price target of $240.93 indicates a modest 9.5% upside, while the highest target of $300 suggests a significant potential gain of 36.4%.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
