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Citi Offers 5 Predictions For Ralph Lauren's June 7 Investor Day

Citi Offers 5 Predictions For Ralph Lauren's June 7 Investor Day
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Ralph Lauren Corp (NYSE: RL) is scheduled to host its first investor day since 2007 on June 7. Citi’s Kate McShane reiterated a Buy rating on the company, with a price target of $101.

Investor Day

McShane expects Ralph Lauren to formally introduce its new CEO, Stefan Larsson, at the event, along with the new leadership team that will results from the “executive shake-up” in May.

“We continue to believe that the event could be a positive catalyst for shares, with our expectation that mgmt could finally lay out longterm targets, including DTC & int’l, plans to revive the wholesale business and supply chain, and introduce FY17 guidance,” the analyst mentioned.

What Citi Predicts

Although the company historically does not provide long term targets, McShane believes that the decision to host an investor day could be indicative of CEO Larsson introducing a longer term outlook.

Following management having guided to a sales decline and operating margin expansion for 2016, the analyst expects “a - DD decline in wholesale sales on a pullback in distribution & stronger trends in retail following Q4 improvements.”

In addition, McShane stated that Ralph Lauren was likely to announce further cost cuts in the near term, while providing more details on how the company intends to improve its supply chain to enhance its competitive position in fast fashion.

“We’ll be looking for global DTC plans by brand, including stores & ecommerce,” the analyst said, while adding that the company was also expected to reveal its international expansion plans.

Latest Ratings for RL

May 2017Tigress FinancialInitiates Coverage OnNeutral
Apr 2017RBC CapitalInitiates Coverage OnSector Perform
Feb 2017Atlantic EquitiesDowngradesNeutralUnderweight

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Posted-In: Citi Kate McShaneAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas Best of Benzinga


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