RL: Brand Elevation And Margin Expansion Will Support Durable Earnings Strength

We are nudging our fair value estimate for Ralph Lauren modestly higher to approximately $369.46 from about $366.75 per share, reflecting analysts' incremental price target increases into the mid to high $300s and low $400s range as they cite sustained brand momentum, conservative multi year growth guidance, and improving margin and EPS outlooks.

Analyst Commentary

Recent Street research on Ralph Lauren has tilted decisively positive, with a series of upward price target revisions clustered in the mid to high $300s and one notable target in the low $400s. The updates largely reflect confidence in the durability of brand momentum, operational discipline, and the potential for upside to management's conservative multi year outlook.

Bullish Takeaways

• Bullish analysts point to robust brand momentum across all key geographies, supporting the case for sustained low to mid single digit revenue growth and justifying higher valuation multiples.
• Multiple firms have raised outer year EPS estimates, citing a combination of margin expansion and better sales visibility. This supports a pathway to earnings outperformance versus current Street expectations.
• Commentary around the brand elevation and multi year growth strategy suggests ample runway for premium pricing, mix upgrades, and direct to consumer penetration. Together, these factors underpin structurally higher profitability.
• The high end price target in the low $400s, notably from JPMorgan, reflects increasing conviction that current guidance embeds conservatism and that execution on the three year plan can unlock further multiple expansion.

Bearish Takeaways

• Bearish analysts, while still generally positive on the story, highlight that the three year plan of mid single digit revenue growth and 100 to 150 basis points of operating margin expansion may cap upside if macro conditions worsen or brand momentum normalizes.
• The modest trimming of at least one price target, despite an Overweight stance, signals concern that a significant portion of the operational improvement may already be reflected in the current share price.
• There is some caution that the stock has become a relative safe haven within the category. This raises the risk of de rating if execution stumbles or if investor preference rotates away from defensive brand stories.
• Conservative guidance, while likely beatable, also reinforces the view that management is prioritizing predictable, profitable growth over aggressive share capture. This could limit near term upside in more bullish market scenarios.

What's in the News

• Unveiled Team USA's Opening and Closing Ceremony uniforms for the Milano Cortina 2026 Olympic and Paralympic Games, marking Ralph Lauren's 10th consecutive Games as official outfitter. The collection will roll out across select U.S. and Italian stores, online channels, and a Cortina pop up shop during the Games (company announcement).
• Launched Polo Ralph Lauren x TOPA, the fourth Artist in Residence collaboration, blending Indigenous led brand TOPA's craftsmanship with Polo Ralph Lauren's Fall/Holiday 2025 collection. A portion of proceeds will be directed to Thunder Valley Community Development Corporation's Lakota language and education initiatives (company announcement).
• Updated Fiscal 2026 guidance to revenue growth of 5% to 7% on a constant currency basis, with an anticipated 200 to 250 basis point tailwind from foreign exchange. The company also projected mid single digit constant currency revenue growth in the third quarter, aided by a 150 to 200 basis point FX benefit (company guidance).
• Continued capital returns via share repurchases, buying back 218,554 shares for $63.16 million between late September and early November 2025. This brings total buybacks under the 2018 authorization to over 24.3 million shares and $3.06 billion (company buyback update).
• Expanded its hospitality portfolio with plans to open The Polo Bar Ralph Lauren in London at 1 Hanover Square in 2028, extending the brand's lifestyle presence alongside its long standing U.K. retail footprint and cultural partnerships such as Wimbledon and The Royal Marsden (company announcement).

Valuation Changes

• The fair value estimate has risen slightly to approximately $369.46 per share from about $366.75 per share, reflecting modestly higher long term earnings power assumptions.
• The discount rate has edged up slightly to about 8.95% from roughly 8.92%, indicating a marginally higher required return embedded in the valuation.
• Revenue growth has slipped fractionally to around 5.12% from approximately 5.14%, suggesting a very small tempering of long term top line expectations.
• The net profit margin has increased marginally to roughly 12.72% from about 12.72%, implying a slightly more optimistic view on structural profitability.
• The future P/E has risen modestly to about 24.35x from roughly 24.15x, signaling a small uplift in the multiple applied to forward earnings.