Ralph Lauren upgraded to Buy from Neutral at Guggenheim

Guggenheim upgraded Ralph Lauren to Buy from Neutral and established a $166 price target on the shares, which the firm says represents about 45% potential upside from current levels. The firm is increasing its FY24 and FY25 EPS estimates to above consensus, citing its belief that there are opportunities to deliver better than previously expected gross margins, aided by clean inventories, lower freight expenses, and lower cotton prices. Management has stated on earnings calls that they expect cotton to remain a headwind on the P&L through the majority of fiscal 2024 and turn to a tailwind around the last month of its fiscal year, notes the firm, which “would like to be ahead of this tailwind.”