Today, Monday June 6th at 1PM ET we will release a deck and concurrently host a call to present what we believe to be the key issues headed into Ralph Lauren’s first ever Investor Day, which it is hosting tomorrow (Tuesday June 7th). We don’t claim to have all the answers – yet – but sometimes half the battle is simply knowing the critical uncertainties for a stock – especially one with such a high level of opacity as RL.
Call Details:
Toll Free:
Toll:
UK: 0
Confirmation Number: 13638699
Materials: CLICK HERE
Live Video: CLICK HERE
To be clear, we definitely have a positive bias toward the stock and think that there’s asymmetric upside with the stock under $100. This is a company that just 18 months ago was thought – quite confidently by the Street – to have $10+ in EPS power for this year alone. And now in the midst of overlapping restructuring plans and management changes we’re looking at $6.50, at best. So we went from a peak multiple on (unrealistic and unachieved) peak earnings, to a trough non-recessionary multiple on trough earnings with short interest at all-time highs (outside of the Great Recession). All in, we’re inclined to think that EPS starts with an $8 before it starts with a $5. In other words, we’ve likely seen bottom.
We’ll outline the key issues on Monday that Ralph needs to show to give us confidence that this could be one of the biggest stocks in retail over the next 18 months.