UPDATE: JP Morgan Initiates Ralph Lauren Corporation with Neutral, $155 PT; High Investment Hurdles

JP Morgan initiates its coverage on Ralph Lauren Corporation

with a Neutral rating and a price target of $155. JP Morgan comments, "RL's brand is “best in class” with top-line growth prospects (long-term goal to double its revenue base) driven by International expansion (35% today vs. 66% goal) largely at retail (stores/e-commerce). That said, RL is undergoing a multi-year channel transition from wholesale (20.5% EBIT today) to retail (16.3%), which will improve brand equity over time but constrain margins given increased investment spend (CRM; e-commerce) for the next 2-3 years, in our view. While RL is making the right moves for the LT (consistency, DD EPS growth) deserving of a premium multiple (JPM PT based on 17.0x '13E), we view RL shares as fully valued today." RL closed at $143.30 on Thursday.