Bank of America has raised its price objective on Ralph Lauren Corp (NYSE:RL) to $450 from $400 while reiterating a ‘Buy’ rating, pointing to a longer-duration outlook for margin-accretive growth and additional earnings upside.
The analysts now value the stock on a higher earnings multiple, reflecting what they see as a structural improvement in business quality and a more luxury-aligned positioning.
“After multiple years of growth driven by a highly successful brand elevation strategy, the key debate on RL today is whether growth ahead justifies buying in at valuation well above peer and historical levels,” they wrote.
“We say yes and reiterate ‘Buy;’ we see a long horizon on margin-accretive growth opportunities supporting potential for EPS & valuation upside.
While the stock already trades at a premium, they argue that continued brand elevation and more consistent earnings delivery support that gap. They state the company should “trade more like a luxury brand & less like historical levels/peers.”
The revised price target is based on a 22x fiscal 2028 price-to-earnings multiple, replacing a prior EV/EBITDA framework and reflecting forward earnings as the primary valuation anchor.
The analysts also highlighted that “continued brand elevation and consistency of sales/EPS growth over time supports further multiple expansion.”
Key to the outlook is ongoing growth in higher average unit retail (AUR) categories that remain underpenetrated. Women’s apparel represents roughly one-third of sales despite stronger engagement from female consumers, while handbags remain a small but fast-growing business line. International expansion, especially in Asia, continues to outpace overall company growth and is seen as a durable driver.
The analysts expect near-term growth to remain weighted toward AUR rather than volume, though they see potential for a gradual shift as higher-quality categories expand and unit growth broadens. This mix shift is viewed as supportive of sustained margin expansion over time.
On earnings, they highlighted Ralph Lauren’s consistent pattern of outperforming expectations and raising guidance. They also noted that recent strength does not appear to be purely timing-driven, with profitability gains supported by pricing power, operating efficiencies, and continued reinvestment in marketing.
Valuation remains a key point of discussion, with Ralph Lauren trading above both US apparel peers and its own historical averages. The analysts argue this premium is increasingly justified by stronger margins, improved brand positioning, and an international mix that is closer to European soft luxury peers than traditional US retailers. Their 22x multiple assumption aligns more closely with European soft luxury averages, though still below the highest-tier luxury names.