Ralph Lauren Corporation (RL)

Ralph Lauren Corporation (RL)

In this report, analyst Sten Almgren takes a closer look at Ralph Lauren Corporation (RL). After a five year long strategic reset, RL is on a trajectory to position itself in the global luxury lifestyle market. While margins and returns on capital are steadily improving, and with strong growth prospects, a target multiple of 13.8x EV/EBIT FY2024 is justified, implying a 12-month upside of 42.9%.

Investments highlights

  • Momentum in DTC and digital channels, combined with further room for AUR growth, is expected to drive top-line growth and margin expansion FY24-25E, in spite of retail sector headwinds
  • Opportunities in Women’s and Asia-segment are likely to ensure sustainable long term growth
  • Capital allocation decisions by current management will be foundational to steady improvements in ROIC FY23-FY27E

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