In a research note issued this morning, Goldman Sachs gave a big upgrade to fashion company Ralph Lauren (NYSE:RL), skipping neutral as it boosted the apparel and accessory business from a sell rating up to a buy. As part of its upgrade, it also set a price target of $141, a 36.9% upside from the $102.99 share price Ralph Lauren started today's trading with, and 66% higher than Wall Street's consensus $86.89 price target.

This bold break with the rest of Wall Street's analysts rests on a handful of factors. Goldman Sachs cited an inflection in the clothing sector, plus "several management initiatives to elevate the brand" as positives. The firm goes on to identify "the direct-to-consumer and Digital channel shift" as the major element justifying its soaring upside expectations.

The Ralph Lauren Polo store in Rome, Italy.

The Ralph Lauren Polo store in Rome. Image source: Ralph Lauren Corporation.

These points echo Ralph Lauren's late-September press release about its growth strategy. The fashion company spoke of its digital transformation, which included a system for planning and human resources using cloud-based technology, along with streamlining shopping and personalization of items for customers. Goldman Sachs appears to believe Ralph Lauren is executing well on these plans.

More recently, Ralph Lauren also launched a virtual-store program, enabling online shoppers to navigate depictions of the company's major brick-and-mortar stores around the planet, using images of items on display to place orders, as Forbes reports.

The gimmick appears to be catching on: During the company's fiscal second-quarter 2021 earnings conference call on Oct. 29, CFO Jane Nielsen said online comparable sales rose 12% year over year, while brick-and-mortar comps were down 30% (though this was a rebound from the first quarter's 66% drop), possibly lending some weight to Goldman Sachs' confident predictions.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.