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Ralph Lauren Corporation (NYSE:RL) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now. BTIG analyst Bob Drbul, on February 6, raised the firm’s target price on Ralph Lauren by 8.8% to $435 (from $400) and reiterated his Buy recommendation on the stock. He likes the margin expansion, which the company exhibited in Q3 FY2026, both on an operating level (+220 basis points to 20.9%) and a gross level (+150 basis points). The margin expansion was driven by a more favorable product mix and che ...

Core Insights - Investors should focus on companies that deliver strong returns after considering both operating and non-operating expenses, making profitable businesses more appealing than those with losses [1] - The net income ratio is a key measure of profitability, reflecting the percentage of net income relative to total sales revenues, indicating a company's effectiveness in managing expenses [3] Company Highlights - Micron Technology, Inc. (MU) has a net profit margin of 28.2% and an expected earnings growth rate of 307.5% for the current year, making it a top pick for profitability [6][8] - Ralph Lauren Corporation (RL) has a net profit margin of 11.7% with an expected earnings growth rate of 30.5% for the current year, positioning it as a strong candidate for investment [7][8] - Modine Manufacturing Company (MOD) has a net profit margin of 3.4% and an expected earnings growth rate of 18.8% for the current year, also qualifying as a profitable investment option [9][8] Screening Criteria - The screening process identified stocks with a Zacks Rank of 1 (Strong Buy), indicating a history of outperformance regardless of market conditions [4] - Companies with trailing 12-month sales and net income growth higher than their industry are likely to perform well, alongside those with a net income ratio exceeding their industry average [5] - A strong buy percentage rating greater than 70% indicates that a significant majority of broker recommendations favor these stocks [5]

Core Viewpoint - Ralph Lauren Corporation (NYSE:RL) is identified as a strong luxury stock investment opportunity, with a reaffirmed Buy rating and a price target of $435 following strong fiscal Q3 2026 results that exceeded expectations [1]. Financial Performance - Fiscal Q3 2026 revenue increased by 12% on a reported basis and 10% in constant currency, indicating robust demand across various regions [1]. - Earnings per diluted share for the quarter were reported at $5.82, a 25% increase year-over-year, while adjusted earnings per diluted share were $6.22, reflecting a 29% increase when excluding restructuring-related and other net charges [2]. Future Outlook - The company anticipates revenue growth in fiscal 2026 to be in the high-single to low-double digits on a constant currency basis, an increase from the previous forecast of 5% to 7% [3]. - Foreign currency is expected to contribute approximately 200 to 250 basis points to revenue growth in fiscal 2026, based on current exchange rates [3]. Company Overview - Ralph Lauren Corporation specializes in luxury fashion retail, offering a range of products including apparel, footwear, accessories, fragrances, and home goods. The brand portfolio includes Ralph Lauren, Polo Ralph Lauren, and others, along with hospitality ventures like The Polo Bar in New York City [4].

Core Viewpoint - Ralph Lauren Corporation is a leading designer and distributor of premium lifestyle products, with a market capitalization of $22.4 billion, offering a diverse range of products including apparel, footwear, and home furnishings [1] Performance Summary - Ralph Lauren's shares have outperformed the broader market, with a 31.9% increase over the past 52 weeks and a 6.9% year-to-date rise, compared to the S&P 500 Index's 12.3% return over the same period [2] - The company also outperformed the State Street Consumer Discretionary Select Sector SPDR ETF, which rose by 3.4% over the past 52 weeks [3] Earnings Report - In Q3 2026, Ralph Lauren's revenue grew by 12.2% year-over-year to $2.4 billion, exceeding Wall Street estimates, while adjusted EPS reached $6.22, also surpassing expectations [3] - For the fiscal year ending in March 2026, analysts project a 31.9% year-over-year growth in EPS to $16.26 on a diluted basis, with a strong earnings surprise history [4] Analyst Ratings - Among 19 analysts covering Ralph Lauren, the consensus rating is a "Strong Buy," with 14 "Strong Buy" ratings, one "Moderate Buy," and four "Holds" [4] - Jefferies analyst maintained a "Buy" rating but lowered the price target from $425 to $410, with a mean price target of $412.81 indicating a 9.2% premium to current price levels, and a Street-high target of $477 suggesting a 26.2% potential upside [5]

Core Viewpoint - The consumer discretionary sector has shown moderate growth over the past year, but is currently experiencing a negative year-to-date performance, prompting the identification of five stocks with potential for investment despite the sector's recent slump [2][4]. Consumer Discretionary Sector Overview - The consumer discretionary sector is characterized as growth-oriented, with share prices expected to increase over the long term. This sector is sensitive to market interest rate movements and typically exhibits an inverse relationship with them [3]. Interest Rate Impact - The Federal Reserve's recent easy monetary policies, including significant cuts to the benchmark lending rate, have created uncertainty regarding interest rate trajectories for the current year. Additionally, concerns about AI's impact on corporate profits have affected growth-oriented stocks [4]. Selected Stocks for Investment - Five consumer discretionary stocks have been identified for investment based on their favorable Zacks Rank: Ralph Lauren Corp., Roku Inc., Airbnb Inc., FOX Corp., and Carnival Corporation & plc. Each stock carries a Zacks Rank of 1 (Strong Buy) or 2 (Buy), with potential for double-digit price upside in the short term [5]. Ralph Lauren Corp. (RL) - Ralph Lauren has a Zacks Rank of 2 and is benefiting from its "Next Great Chapter: Drive Plan," which emphasizes brand elevation and operational agility. The company expects revenue growth in the high-single to low-double digits for fiscal 2026, with gross margin increasing by 40-80 basis points and operating margin expanding by 100-140 basis points [6][7]. - The expected revenue and earnings growth rates for Ralph Lauren are 11.7% and 30.5%, respectively, for the current year, with a short-term average price target indicating an 11.8% increase from the last closing price of $369.18 [8]. Roku Inc. (ROKU) - Roku holds a Zacks Rank of 1, showcasing strong platform revenue growth driven by innovative advertising and streaming services. The company has achieved significant household penetration and improved profitability through strong free cash flow generation [9][10]. - Roku's expected revenue and earnings growth rates are 15.4% and over 100%, respectively, for the current year, with a short-term average price target suggesting a 35.7% increase from the last closing price of $90.06 [13]. Airbnb Inc. (ABNB) - Airbnb has a Zacks Rank of 2 and is experiencing growth in Nights and Experiences Booked, positively impacting its Gross Booking Value. The company benefits from increasing guest demand and a recovery in cross-border travel [14][15]. - The expected revenue and earnings growth rates for Airbnb are 10.8% and 18.1%, respectively, for the current year, with a short-term average price target indicating a 20.4% increase from the last closing price of $121.35 [16]. FOX Corp. (FOX) - FOX has a Zacks Rank of 1 and produces a variety of content, including news and sports. The expected revenue and earnings growth rates for FOX are -0.9% and -2.3%, respectively, for the current year, but the Zacks Consensus Estimate for earnings has improved by 6.9% over the last 30 days [17]. - The short-term average price target for FOX suggests a 36.1% increase from the last closing price of $51.56 [18]. Carnival Corporation & plc (CCL) - Carnival has a Zacks Rank of 1 and is benefiting from strong demand, increased booking volumes, and a focus on marketing to attract new customers. The company emphasizes the role of digital marketing and AI in enhancing effectiveness [19][20]. - The expected revenue and earnings growth rates for Carnival are 4.6% and 12.9%, respectively, for the current year, with a short-term average price target indicating a 19.1% increase from the last closing price of $31.77 [21].

Industry Overview - The consumer discretionary sector has experienced moderate growth over the past year, despite a strong rally in U.S. stock markets, and is currently in the negative year-to-date [1] - The sector is growth-oriented, with share prices typically increasing over a long period, but it is sensitive to market interest rate movements [1] Monetary Policy Impact - The Federal Reserve has implemented easy monetary policies with significant cuts in the benchmark lending rate over the last two years, leading to uncertainty about interest rate trajectories this year [2] - Concerns regarding AI-led corporate profits have also impacted growth-oriented stocks [2] Investment Opportunities - Five consumer discretionary stocks have been identified with favorable Zacks Ranks for investment, showing double-digit price upside potential in the short term: Ralph Lauren Corp. (RL), Roku Inc. (ROKU), Airbnb Inc. (ABNB), FOX Corp. (FOX), and Carnival Corporation & plc (CCL) [3][9] - Each selected stock carries either a Zacks Rank 1 (Strong Buy) or 2 (Buy) [3] Ralph Lauren Corp. (RL) - Ralph Lauren has benefited from its "Next Great Chapter: Drive Plan," focusing on brand elevation and operational agility, leading to robust financial performance [6] - The company expects revenues to increase in the high-single to low-double digits for fiscal 2026, with gross margin expected to rise by 40-80 basis points and operating margin by 100-140 basis points [7] - Expected revenue and earnings growth rates for the current year are 11.7% and 30.5%, respectively, with a 5% improvement in the earnings consensus estimate over the last 30 days [8] Roku Inc. (ROKU) - Roku demonstrates strong platform revenue expansion driven by innovative advertising capabilities and a growing distribution of streaming services [11] - The company has achieved substantial household penetration and improved profitability, with expected revenue and earnings growth rates of 15.4% and over 100%, respectively, for the current year [15] - The short-term average price target indicates a potential increase of 35.7% from the last closing price, with a maximum upside of 77.8% [15] Airbnb Inc. (ABNB) - Airbnb is experiencing positive trends in Gross Booking Value due to improvements in Nights and Experiences Booked, driven by increasing guest demand and recovery in cross-border travel [16][17] - The expected revenue and earnings growth rates for the current year are 10.8% and 18.1%, respectively, with a 0.6% improvement in the earnings consensus estimate over the last seven days [18] - The short-term average price target suggests a potential increase of 20.4% from the last closing price, indicating a maximum upside of 64.8% [18] FOX Corp. (FOX) - FOX produces and distributes a variety of content, including news and sports, but has expected revenue and earnings growth rates of -0.9% and -2.3%, respectively, for the current year [19] - The short-term average price target indicates a potential increase of 36.1% from the last closing price, with a maximum upside of 68.7% [20] Carnival Corporation & plc (CCL) - Carnival is benefiting from sustained demand, increased booking volumes, and a focus on marketing to attract new customers [21][22] - The expected revenue and earnings growth rates for the current year are 4.6% and 12.9%, respectively, with a 5.8% improvement in the earnings consensus estimate over the last 60 days [23] - The short-term average price target suggests a potential increase of 19.1% from the last closing price, indicating a maximum upside of 44.8% [23]

春节前夕，深圳人才公园的人流并未因夜色散去。节日临近，城市进入一种被打开的公共状态，人们更愿意停留，也更容易被共同的瞬间吸引注意。 就在这样的夜晚，一场以"策马逐梦"为主题的无人机光影秀在公园上空展开。人群很自然地抬头，视线被夜空牵引。最初，光点在水面般的深色夜空中铺陈 开来，像城市倒影被轻轻点亮；随后，光影在空中迅速聚合，马的轮廓从流动的线条中显现，仿佛从水面跃出，又在夜空中奔行。 紧接着，马球选手的身影在奔行的轨迹中显现，挥杆的动作与马的动势自然衔接。球被击出的瞬间，光点在空中扩散开来，如水波般向外铺展，随后重新汇 聚，最终呈现出Ralph Lauren标志性的骑士小马图案。熟悉的符号在夜空中完成一次清晰的显现，又在光影流动中缓缓退场。 在春节前夕这一时间节点上，马年、夜空与节日情绪被叠加在同一刻，凝成一个被很多人同时看见、同时记住的公共画面。它不制造情绪高潮，而是通过节 奏推进与光影反复聚合，让人意识到这是一个值得停下观看、也会被城市记住的夜晚。 也正是在这样的场景里， Ralph Lauren的存在显得与周围的热闹保持着一点距离。现场没有产品被强调，并非以销售为导向，但"策马逐梦"所指向的，是品 牌反 ...

Economic Overview - Consumer sentiment in the U.S. improved to a six-month high of 57.3 in February, up from 56.4 in January, surpassing the consensus estimate of 55 [3][11] - Despite concerns over high prices and a tightening labor market, consumers remain optimistic about inflation easing in the near future [4][5] Consumer Discretionary Stocks - Recommended stocks include Carnival Corporation & plc (CCL), Dolby Laboratories, Inc. (DLB), Marriott International, Inc. (MAR), and Ralph Lauren Corporation (RL) due to positive earnings estimate revisions and strong Zacks rankings [2] - CCL, the largest cruise operator globally, has an expected earnings growth rate of 12.9% for the current year, with earnings estimates improving by 5.8% over the last 60 days [8][11] - DLB, which focuses on audio and imaging technologies, has an expected earnings growth rate of 0.9% for the current year, with estimates up by 1.9% in the past 60 days [10] - MAR, a leading hospitality company, anticipates earnings growth of 15.7%, with estimates increasing by 1% over the last 60 days [11] - RL, a designer and distributor of premium lifestyle products, expects a significant earnings growth rate of 30.5% for the next year, with estimates improving by 5.2% in the past 60 days [13]

Core Insights - Ralph Lauren's financial performance for Q2 of fiscal year 2026 shows a net revenue of $2.011 billion, representing a year-over-year growth of 16.6%, and a net profit of $208 million, which is a 40.3% increase compared to the previous year [2] Financial Performance - The company reported a strong revenue growth across global markets, with North America up 13%, Europe up 22%, and China exceeding 30% growth, marking 18 consecutive quarters of double-digit growth [2] Strategic Initiatives - Ralph Lauren has expanded its direct retail stores in Asia to 249, leading all global regions. The management emphasized focusing on female consumers and optimizing store formats to drive growth, with China being highlighted as the most gender-balanced market globally [3] Future Outlook - The company typically releases quarterly earnings reports, and investors should watch for upcoming announcements regarding the fiscal year 2026, although specific dates have not been disclosed. Global macroeconomic factors, such as tariff policies, may indirectly impact the company's operations [4]