Bull of the Day: Ralph Lauren (RL)

Part of the reason some of the other stocks in the low-rated Zacks Textile-Apparel Industry may be struggling is because of Ralph Lauren's RL dominance.

Although the Textile-Apparel Industry is currently in the bottom 31% of over 240 Zacks industries, Ralph Lauren stock has been a notable standout.

Thanks to its strategic expansion and digital transformation, Ralph Lauren is taking market share from mid-tier competitors like GIII Apparel GIII, Levi Strauss LEVI, Urban Outfitters URBN, and even PVH PVH, which operates iconic brands like Calvin Klein and Tommy Hilfiger.

Furthermore, while other apparel retailers have experienced weakness stemming from an inflation-conscious consumer, Ralph Lauren has continued to expand its clothing, footwear, and apparel brand as a lifestyle repertoire that’s increasingly desirable across generations and geographies.

Ralph Lauren’s Blazing Stock Performance

Speaking to Ralph Lauren’s industry-leading stock gains, RL shares are up more than +35% YTD, to blaze the benchmark S&P 500’s +14%, with many of its textile-apparel peers being in correction territory outside of Levi Strauss and Urban Outfitters.

Over the last three years, only Urban Outfitters has been able to match Ralph Lauren’s blazing gains of +235%, which has impressively topped the benchmark’s +76% and has demolished the Zacks Textile-Apparel Market’s -21%.

Global Expansion & Digital Transformation

Themed as the “Next Great Chapter,” Ralph Lauren’s Accelerate Plan is driving growth by expanding its presence in key cities and capitalizing on direct-to-consumer (DTC) channels.

Building off of its dominance in North America, and giving Ralph Lauren a broader edge on emerging domestic apparel companies, such as Urban Outfitters, is that its digital sales have surged in Europe and Asia in particular. Attributed to investments in mobile shopping, fulfillment services, and personalized promotions, Ralph Lauren has added nearly 3.5 million new customers to its DTC business this year.  

Helping to streamline Ralph Lauren’s premiumization strategy and DTC growth is that the company is leveraging AI-driven insights and social media storytelling to deepen its connection with global audiences.

Record Growth & Positive EPS Revisions  

Focusing on high-margin, luxury offerings that resonate with affluent consumers (premiumization), Ralph Lauren’s total sales are expected to be up 6% in its current fiscal 2026 and are projected to increase another 5% in FY27 to what would be an all-time high of $7.87 billion.

Hitting multi-year revenue peaks, Ralph Lauren’s top line has rebounded swiftly since the pandemic, stretching 60% in the last five years, from $4.4 billion in FY21 to over $7 billion in FY25.  

Even better, has been Ralph Lauren’s increased profitability, achieving record EPS. Ralph Lauren’s annual earnings are now forecasted to spike another 20% in FY26 to $14.77 per share, versus a previous EPS peak of $12.33 in FY25.

Plus, FY27 EPS is projected to rise another 9% to $16.08. More exhilarating, in the last 60 days, FY26 and FY27 EPS estimates have risen over 7% respectively.

RL Average Zacks Price Target

Based on the short-term price targets offered by 17 analysts, the Average Zacks Price Target of $340.06 a share still suggests 8% upside for Ralph Lauren’s stock.

It’s also noteworthy that Ralph Lauren is starting to receive upgrades from several analysts who have adjusted their price targets to over $350, including analysts at Barclays BCS and UBS UBS, with UBS having a street-high price tag of $404.

Ralph Lauren’s Valuation is Still Reasonable

While it might be surprising to see Ralph Lauren stock soaring to such a lofty price tag, its valuation is still reasonable and supports the bullish outlook being relayed by analysts.

To that point, Ralph Lauren stock trades at 21.2X forward earnings, which is near its industry average of 16X and still offers a discount to the S&P 500’s 25.5X. RL shares are also trading near the optimum level of less than 2X sales.

Conclusion & Summary

Ralph Lauren has long been one of the most popular and iconic apparel brands, but we’ve never seen the company (or its stock) fire on all cylinders like this. Attributed to its global expansion and digital transformation, Ralph Lauren has taken the lid off its growth potential.

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This article originally published on Zacks Investment Research (zacks.com).

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