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There’s no better time to buy up shares of a solid apparel name with upside potential, according to Barclays. Analyst Paul Kearney assumed coverage of Ralph Lauren in a Friday note to clients, upgrading the retail stock to overweight from equal weight and highlighting the company’s “position as a best-in-class apparel brand with a proven track record of brand elevation.” Barclays sees continued growth opportunities within Ralph Lauren’s international, women’s and digital-focused direct-to-consumer segments, viewing the latter as being able to protect the company from any weakness within the wholesale market. “RL in our view should be able to retain higher pricing by driving traffic through compelling product as well as elevated publicity with relevant brand partners,” he wrote. Kearney adjusted the firm’s price target to $134 a share, suggesting that Ralph Lauren shares stand to rally as much as 14% from Thursday’s close. The stock climbed 2% in the premarket. Along with Ralph Lauren, Kearney assumed coverage of Calvin Klein parent-company PVH Corp , and upgraded shares to overweight from equal weight, citing improvement within North American markets. He also views shares as trading at a cheaper valuation to peers, especially as macro headwinds, like those from foreign exchange, beginning to ease. He expects upside to estimates if the company makes any progress on its PVH+ growth plan, which includes a goal to achieve revenue of $12.5 billion and a 15% operating margin by the 2025 fiscal year. Kearney lifted the bank’s price target to $106 a share, implying more than 27% upside from Thursday’s close. PVH shares rose more than 2% before the bell. Both stocks should also benefit from improving conditions among European consumers, given their high exposure to that market. — CNBC’s Michael Bloom contributed reporting
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