Ralph Lauren stock jumped over 3 percent to $133 after Stephens analyst Rick Patel upgraded the stock to an “overweight” rating from an “equal weight” rating based on valuation. Patel noted that since the stock is down 30 percent year-to-date, most of the company’s problems are priced into the stock. Patel believes the depressed stock price offers a good buying opportunity.

Patel was clear that he didn’t believe that the next year would be a good one for Ralph Lauren. He pointed out that Lauren would be affected by currency issues, sluggish tourist sales and investment spending in systems initiatives. However, once Lauren gets through this year of headwinds, things should be looking up.

Ralph Lauren took a $185 million hit from foreign exchange and is also spending heavily to bring its e-commerce business back in-house. E-commerce accounts for 7 percent of sales or $500 million. Patel said margins should improve once Ralph Lauren no longer has to make payments to GSI, the current e-commerce site operator.

“We think the heavy lifting will be done this year,” Patel said. He expects the company’s earnings growth will improve sequentially and accelerate in 2017. He thinks that initiatives like Polo Women’s, Polo Sport, Polo retail, accessories and e-commerce will drive sales.

Patel said it was early and he didn’t change his target price of $155, but believes the scaling of the Polo retail concept globally will benefit the company’s sales.

Ralph Lauren last declared its earnings on May 13, when it reported $1.41 in earnings, which beat the Thomson Reuters estimate of $1.32. The company also delivered revenue of $1.89 billion, which topped the estimate of $1.88 billion. There are 21 analysts covering the stock with an average target price of $140 and 14 of the analysts have a hold rating on the stock.

Ralph Lauren recently celebrated 10 years as the official outfitter for Wimbledon and Presidential candidate Hillary Clinton wore a Ralph Lauren pantsuit at her campaign opening rally in New York. The company will also present a men’s collection on Thursday at the Council of Fashion Designers of America’s New York Fashion Week: Men’s shows.

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