Ralph Lauren ‘s solid fundamentals have translated to a promising long-term growth outlook, according to Guggenheim. The firm upgraded shares of the apparel company to a buy rating from neutral on Monday, and initiated a price target of $166. This forecast implies more than 45% upside from the stock’s Friday close of $113.86. Shares of Ralph Lauren have climbed nearly 8% since the start of 2023. RL YTD mountain Ralph Lauren stock year to date Analyst Robert Drbul cited the company’s strong balance sheet and attractive valuation as reasons for the upgrade. “The 8% relative underperformance to the S & P 500 YTD (RL +7.8% vs. S & P +15.9%), and recent pullback in the shares has provided an attractive entry point,” he wrote. The analyst expects Ralph Lauren’s earnings to benefit from several cyclical tailwinds and boosted his estimates for the next two years. Drbul expects full-year 2024 adjusted earnings of $9.50 per share and $10.75 in 2025 — above Wall Street consensus and up from $9.15 and $10.35 per share, respectively. “Our updated view includes our belief that there are opportunities to deliver better than we previously expected gross margins into 2024 and 2025, aided by clean inventories, lower freight expenses, and lower cotton prices,” Drbul said. “Overall, we think RL management is making solid progress attracting new customers (1.2 million new customers in its recent quarter), successfully elevating the brand and is taking appropriate steps to drive long-term meaningful growth across all channels and geographies.” — CNBC’s Michael Bloom contributed to this report.