Will Ralph Lauren (RL) Stock Be Helped Today By This Analyst Upgrade?

NEW YORK (TheStreet) -- Ralph Lauren Corp (RL) was upgraded to "strong buy" from "buy" at ISI Group this morning with a price target of $230, up from a previous $210.

Analysts at the firm raised its rating on the apparel retail brand based on relative valuation, a more effective organization structure and the launch of its first Polo women's collection.

Shares of Ralph Lauren closed at $172.50 yesterday.

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Separately, TheStreet Ratings team rates RALPH LAUREN CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate RALPH LAUREN CORP (RL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.5%. Since the same quarter one year prior, revenues slightly increased by 3.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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 1.68, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for RALPH LAUREN CORP is rather high; currently it is at 61.07%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.48% is above that of the industry average.
  • Net operating cash flow has increased to $415.00 million or 40.67% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.36%.
  • You can view the full analysis from the report here: RL Ratings Report

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