NEW YORK (TheStreet) -- Ralph Lauren (RL - Get Report) shares closed up 0.79% to $158.12 on heavy volume trading after Credit Suisse (CS - Get Report) upgraded its rating to "outperform" from "neutral," and Deutsche Bank (DB - Get Report) maintained its "buy"rating earlier today.
Credit Suisse cited growth in sales and wholesale accounts in European markets, as well as improved inventory conditions.
Deutsche Bank said a weaker-than-expected outlook for the fiscal second quarter, as well as sluggish wholesale trends, are outweighed by strong revenue and gross margins.
TheStreet Ratings team rates RALPH LAUREN CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate RALPH LAUREN CORP (RL) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- RL's revenue growth has slightly outpaced the industry average of 8.3%. Since the same quarter one year prior, revenues rose by 13.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- RL's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, RL has a quick ratio of 2.10, which demonstrates the ability of the company to cover short-term liquidity needs.
- RALPH LAUREN CORP has improved earnings per share by 22.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, RALPH LAUREN CORP increased its bottom line by earning $8.42 versus $8.00 in the prior year. This year, the market expects an improvement in earnings ($8.68 versus $8.42).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry average. The net income increased by 20.3% when compared to the same quarter one year prior, going from $127.20 million to $153.00 million.
- You can view the full analysis from the report here: RL Ratings Report