:max_bytes(150000):strip_icc()/GettyImages-21970594581-f176d86d1bde479d850de8372e50d0cc.jpg?w=780&resize=780,470&ssl=1 "Deutsche Bank Goes Bullish on Luxury Brand Ralph Lauren’s Stock")
Key Takeaways
- Deutsche Bank resumed coverage of Ralph Lauren Friday, giving its shares a “buy” rating and relatively bullish price target.
- The retailer’s stock may even be on par with luxury European fashion houses, the analysts said.
- They think Ralph Lauren is poised to gain market share and expand across geographies and channels.
Ralph Lauren is a luxury brand with an appealing stock, according to Deutsche Bank analysts.
The bank on Friday resumed coverage of Ralph Lauren (RL) with a “buy” rating and a price target of $343—roughly 24% above where shares closed Thursday, and the second-highest tracked by Visible Alpha. The average price target among analysts that follow Ralph Lauren and polled by Visible Alpha was a bit above $327.
“We see [Ralph Lauren] as a market share gainer, with growth levers across geographies, channels, and categories more than offsetting reduced wholesale doors, ultimately positioning the brand closer to European luxury peers,” said Deutsche Bank.
Ralph Lauren stands out thanks to its strong fundamentals, pricing power, and limited sourcing from China, analysts said. Exports from China are currently subject to a minimum 30% import tax in the U.S.
Ralph Lauren said last week it was raising prices in North America this fall and assessing whether to increase them further as a way to offset the cost of tariffs. Still, the retailer an audience that spans entry-level and aspirational customers, as well as traditional luxury clientele, the analysts said.
This allows Ralph Lauren to “capture consumers trading both up and down,” they said.
Ralph Lauren had a strong holiday season, allowing the retailer to ease up on discounts and sending its stock to an all-time high in February. Shares have since come down, but remain up some 20% this year. Ralph Lauren stock closed Friday near $277.
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