UPDATE: Deutsche Bank Reiterates On Ralph Lauren Following Expected Disappointing Forecast
In a report published Monday, Deutsche Bank analyst Greg Poole reiterated a Buy rating on Ralph Lauren (NYSE: RL), but lowered the price target from $190.00 to $180.00.
In the report, Deutsche Bank noted, “Disappointing FY15 forecast largely expected. Reiterate Buy, trim forecast & PT. While the updated FY15 EPS forecast fell short of Street expectations (mostly on SG&A spend), several factors keep us at BUY. First, excluding -200bp of y/y OM from incremental FY15 investments in retail development, infrastructure, & marketing, OM would be planned +75bp to +125bp.
"As Ralph's penchant for brand investment is already well known by the market, the focus continues on a 'core' biz, which is seeing positive rev/GM/OM inflection. Also, mgmt. noted improved trends in both its U.S. Factory stores & across Europe, which we believe are not in plan. Finally, RL is supported by ex-cash P/Es of 16.0x/13.8x FY15/FY16 Thomson ONE consensus. Maintain Buy, trim PT & EPS.”
Ralph Lauren closed on Friday at $148.81.
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