UPDATE: Morgan Stanley Upgrades Ralph Lauren Corp. to Overweight, Reiterates $194 PT
In a report published Monday, Morgan Stanley upgraded its rating on Ralph Lauren Corp. (NYSE: RL) to Overweight, and reiterated its $194.00 price target.
Morgan Stanley noted, “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 Corp. closed on Friday at $159.39.
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