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Earnings Beat Supports Ralph Lauren’s Plunging Stock Price

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Stock market performance

Ralph Lauren’s (RL) stock price soared 13% after the company reported better-than-anticipated top and bottom lines on Tuesday, August 8. The results provided much-needed support to the company’s falling stock price and reduced its YTD (year-to-date) losses to 7.7%.

Despite the gains, RL continues to be among the worst-performing branded apparel companies. Rivals PVH (PVH), VF (VFC), and Coach (COH) have risen 35%, 15%, and 35%, respectively, year-to-date.

The S&P 500 Apparel and Accessories Index and the S&P 500 Index (SPX) have recorded YTD gains of 9.1% and 8.9%, respectively.

Wall Street’s take on Ralph Lauren

21 Wall Street analysts cover Ralph Lauren. They rate the stock a three on a scale where one is a “strong buy” and five is a “strong sell.”

The company’s rating improved from 3.1 before results to 3.0 as Atlantic Equities upgraded the stock to “neutral” from “underperform.” Also, a number of analysts raised their price target on Ralph Lauren after the results.

Credit Suisse raised RL’s price target to $91 from $74, Cowen and Company raised it to $89 from $80, UBS raised it to $90 from $73, J.P. Morgan raised it to $86 from $75, RBC raised it to $88 from $75, and Citigroup raised its target to $91 from $79. The average price target on RL is $86.07, reflecting an upside of 3%.

Recommendations

90% of the analysts including analysts from RBC Capital, Cowen and Company, Credit Suisse, and JP Morgan suggest holding Ralph Lauren stock. 5% of analysts recommend buying it, while another 5% suggest selling it.

ETF investors looking to add exposure to Ralph Lauren can consider the PowerShares Russell Midcap Pure Value Portfolio (PXMV), which invests 1.1% of its holdings in the company.

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