Analyst boosts Ralph Lauren's rating

NEW YORK (AP) — Ralph Lauren Corp.'s stock rose more than 5 percent on Thursday as an analyst raised her rating on the clothing company a little over a week after downgrading it.

THE SPARK: Kate McShane of Citi Investment Research lifted Ralph Lauren's rating to "Buy" from "Hold," citing the company's declining stock price. The analyst said in a client note that the retailer's shares have dropped more than 13 percent since she reduced its rating to "Hold" from "Buy" on Sept. 27.

"At the time of the downgrade, we stated that we would be buyers of the name if the stock pulled back to under $135, which is where the stock is currently trading," McShane wrote. Ralph Lauren closed at $132.88 on Wednesday.
THE ANALYSIS: McShane said Ralph Lauren's stock is likely to rise now, similar to when it climbed following previous pullbacks in the share price in July 2010 and in May 2011.
"Although the circumstances for the pullback this time is concern around the global macro environment, we think Ralph Lauren's growth story remains intact," she wrote, adding it's pursuing growth in areas where it has strong market share and in emerging markets.
SHARE ACTION: Shares of Ralph Lauren, whose brands include Ralph Lauren Collection and Club Monaco, gained $6.81, or 5.1 percent, to $139.69 in midday trading. Over the past year, the stock has traded between $90.17 and $154.62. The stock is down 2 percent over the last three months.

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