Ralph Lauren Upgraded at Morgan Stanley (RL)
Morgan Stanley reported on Monday that they have upgraded apparel company, Ralph Lauren Corp(RL).
The firm has increased their rating for RL to an “Overweight,” and has maintained its $194 price target. This price target suggests a 16% increase from the stock’s current price of $161.52.
An analyst from the firm commented, “We believe Ralph Lauren has a good setup in calendar year 2013. It will have easier sales compares, as it will be lapping the Greater China repositioning efforts, intentional decreased distribution in Europe, and discontinuation of American Living. Meanwhile, we believe the company is more focused on the core Polo brand to help grow wholesale sales and square footage growth should be accelerating over the next twelve months (due to expansion in China and potentially new retail strategies in the US). The company will also be lapping considerable IT investments, thus should have better flow through in calendar year 2013. Stronger topline combined with lower investment spend should cause earnings growth to accelerate. With these catalysts, we are more positively inclined on the name, and are raising F2014 estimates to $9.27 and upgrading the stock to Overweight. Our price target is $194, which represents 22% from current levels.”
Ralph Lauren shares were mostly flat during premarket trading Tuesday. The stock has increased 14.8% in the past year.
The Bottom Line
Shares of Ralph Lauren (RL) have a .99% dividend yield, based on last night’s closing stock price of $161.52. The stock has technical support in the $147-$150 price area. If the shares can firm up, we see overhead resistance around the $165-$170 price levels.
Ralph Lauren Corp(RL) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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