RALPH LAUREN CORP (RL) Stock Fundamental Analysis
NYSE:RL - New York Stock Exchange, Inc. - US7512121010 - Common Stock
We assign a fundamental rating of 7 out of 10 to RL. RL was compared to 50 industry peers in the Textiles, Apparel & Luxury Goods industry. RL has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. RL is not valued too expensively and it also shows a decent growth rate. This makes RL very considerable for quality investing!
1. Profitability
1.1 Basic Checks
RL had positive earnings in the past year.
In the past year RL had a positive cash flow from operations.
Of the past 5 years RL 4 years were profitable.
Each year in the past 5 years RL had a positive operating cash flow.
1.2 Ratios
RL's Return On Assets of 10.06% is amongst the best of the industry. RL outperforms 81.63% of its industry peers.
RL has a Return On Equity of 28.00%. This is amongst the best in the industry. RL outperforms 85.71% of its industry peers.
RL has a Return On Invested Capital of 14.62%. This is in the better half of the industry: RL outperforms 79.59% of its industry peers.
RL had an Average Return On Invested Capital over the past 3 years of 12.08%. This is in line with the industry average of 11.58%.
The last Return On Invested Capital (14.62%) for RL is above the 3 year average (12.08%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.06% | ||
| ROE | 28% | ||
| ROIC | 14.62% |
ROA(3y)8.42%
ROA(5y)5.8%
ROE(3y)23.85%
ROE(5y)16.23%
ROIC(3y)12.08%
ROIC(5y)8.89%
1.3 Margins
With an excellent Profit Margin value of 10.15%, RL belongs to the best of the industry, outperforming 89.80% of the companies in the same industry.
In the last couple of years the Profit Margin of RL has grown nicely.
The Operating Margin of RL (12.87%) is better than 85.71% of its industry peers.
In the last couple of years the Operating Margin of RL has grown nicely.
RL has a Gross Margin of 67.51%. This is amongst the best in the industry. RL outperforms 93.88% of its industry peers.
RL's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.87% | ||
| PM (TTM) | 10.15% | ||
| GM | 67.51% |
OM growth 3Y40.1%
OM growth 5Y1.65%
PM growth 3YN/A
PM growth 5Y7.38%
GM growth 3Y0.54%
GM growth 5Y1.6%
2. Health
2.1 Basic Checks
RL has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for RL has been reduced compared to 1 year ago.
Compared to 5 years ago, RL has less shares outstanding
The debt/assets ratio for RL has been reduced compared to a year ago.
2.2 Solvency
RL has an Altman-Z score of 5.21. This indicates that RL is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of RL (5.21) is better than 85.71% of its industry peers.
The Debt to FCF ratio of RL is 1.49, which is an excellent value as it means it would take RL, only 1.49 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.49, RL belongs to the top of the industry, outperforming 81.63% of the companies in the same industry.
A Debt/Equity ratio of 0.40 indicates that RL is not too dependend on debt financing.
RL has a Debt to Equity ratio (0.40) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 1.49 | ||
| Altman-Z | 5.21 |
ROIC/WACC1.69
WACC8.63%
2.3 Liquidity
RL has a Current Ratio of 1.72. This is a normal value and indicates that RL is financially healthy and should not expect problems in meeting its short term obligations.
RL's Current ratio of 1.72 is on the low side compared to the rest of the industry. RL is outperformed by 69.39% of its industry peers.
A Quick Ratio of 1.18 indicates that RL should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.18, RL is in line with its industry, outperforming 48.98% of the companies in the same industry.
The current and quick ratio evaluation for RL is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.72 | ||
| Quick Ratio | 1.18 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 27.96% over the past year.
RL shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.50% yearly.
Looking at the last year, RL shows a small growth in Revenue. The Revenue has grown by 3.65% in the last year.
RL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.99% yearly.
EPS 1Y (TTM)27.96%
EPS 3Y83.51%
EPS 5Y7.5%
EPS Q2Q%20.95%
Revenue 1Y (TTM)3.65%
Revenue growth 3Y14.65%
Revenue growth 5Y0.99%
Sales Q2Q%5.7%
3.2 Future
The Earnings Per Share is expected to grow by 9.96% on average over the next years. This is quite good.
Based on estimates for the next years, RL will show a small growth in Revenue. The Revenue will grow by 3.69% on average per year.
EPS Next Y17.48%
EPS Next 2Y14.84%
EPS Next 3Y14.58%
EPS Next 5Y9.96%
Revenue Next Year3.65%
Revenue Next 2Y4.04%
Revenue Next 3Y4.01%
Revenue Next 5Y3.69%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 21.62, which indicates a rather expensive current valuation of RL.
RL's Price/Earnings is on the same level as the industry average.
RL is valuated rather cheaply when we compare the Price/Earnings ratio to 27.96, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 17.67 indicates a rather expensive valuation of RL.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RL is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of RL to the average of the S&P500 Index (24.11), we can say RL is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.62 | ||
| Fwd PE | 17.67 |
4.2 Price Multiples
RL's Enterprise Value to EBITDA is on the same level as the industry average.
RL's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.83 | ||
| EV/EBITDA | 12.98 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
RL has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as RL's earnings are expected to grow with 14.58% in the coming years.
PEG (NY)1.24
PEG (5Y)2.88
EPS Next 2Y14.84%
EPS Next 3Y14.58%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.36%, RL has a reasonable but not impressive dividend return.
RL's Dividend Yield is a higher than the industry average which is at 2.88.
Compared to an average S&P500 Dividend Yield of 2.33, RL's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.36% |
5.2 History
The dividend of RL has a limited annual growth rate of 4.76%.
RL has paid a dividend for at least 10 years, which is a reliable track record.
RL has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)4.76%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
RL pays out 28.56% of its income as dividend. This is a sustainable payout ratio.
The dividend of RL is growing, but earnings are growing more, so the dividend growth is sustainable.
DP28.56%
EPS Next 2Y14.84%
EPS Next 3Y14.58%
RALPH LAUREN CORP
NYSE:RL (1/17/2025, 8:24:44 PM)
After market: 240.46 0 (0%)240.46
+2.74 (+1.15%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners109.02%
Inst Owner Change-0.02%
Ins Owners3.53%
Ins Owner Change-0.81%
Market Cap14.93B
Analysts77.04
Price Target243.39 (1.22%)
Short Float %5.04%
Short Ratio2.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.36% |
Yearly Dividend3.02
Dividend Growth(5Y)4.76%
DP28.56%
Div Incr Years3
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.27%
Min EPS beat(2)2.48%
Max EPS beat(2)6.05%
EPS beat(4)3
Avg EPS beat(4)5.7%
Min EPS beat(4)-0.14%
Max EPS beat(4)14.41%
EPS beat(8)7
Avg EPS beat(8)11.04%
EPS beat(12)11
Avg EPS beat(12)13.32%
EPS beat(16)14
Avg EPS beat(16)30.61%
Revenue beat(2)0
Avg Revenue beat(2)-0.77%
Min Revenue beat(2)-1.42%
Max Revenue beat(2)-0.12%
Revenue beat(4)1
Avg Revenue beat(4)-0.87%
Min Revenue beat(4)-2.55%
Max Revenue beat(4)0.62%
Revenue beat(8)3
Avg Revenue beat(8)-0.52%
Revenue beat(12)6
Avg Revenue beat(12)0.44%
Revenue beat(16)8
Avg Revenue beat(16)0.82%
PT rev (1m)0.7%
PT rev (3m)25.23%
EPS NQ rev (1m)0%
EPS NQ rev (3m)6%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)4.07%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.47%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.62 | ||
| Fwd PE | 17.67 | ||
| P/S | 2.22 | ||
| P/FCF | 15.83 | ||
| P/OCF | 13.57 | ||
| P/B | 6.11 | ||
| P/tB | 10.14 | ||
| EV/EBITDA | 12.98 |
EPS(TTM)11.12
EY4.62%
EPS(NY)13.61
Fwd EY5.66%
FCF(TTM)15.19
FCFY6.32%
OCF(TTM)17.72
OCFY7.37%
SpS108.54
BVpS39.33
TBVpS23.71
PEG (NY)1.24
PEG (5Y)2.88
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.06% | ||
| ROE | 28% | ||
| ROCE | 18.43% | ||
| ROIC | 14.62% | ||
| ROICexc | 22.81% | ||
| ROICexgc | 33.62% | ||
| OM | 12.87% | ||
| PM (TTM) | 10.15% | ||
| GM | 67.51% | ||
| FCFM | 13.99% |
ROA(3y)8.42%
ROA(5y)5.8%
ROE(3y)23.85%
ROE(5y)16.23%
ROIC(3y)12.08%
ROIC(5y)8.89%
ROICexc(3y)19.57%
ROICexc(5y)14.45%
ROICexgc(3y)28.29%
ROICexgc(5y)20.84%
ROCE(3y)15.23%
ROCE(5y)11.33%
ROICexcg growth 3Y62.44%
ROICexcg growth 5Y-4.41%
ROICexc growth 3Y63.35%
ROICexc growth 5Y-1.3%
OM growth 3Y40.1%
OM growth 5Y1.65%
PM growth 3YN/A
PM growth 5Y7.38%
GM growth 3Y0.54%
GM growth 5Y1.6%
F-Score8
Asset Turnover0.99
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 1.49 | ||
| Debt/EBITDA | 0.91 | ||
| Cap/Depr | 70.79% | ||
| Cap/Sales | 2.34% | ||
| Interest Coverage | 19.63 | ||
| Cash Conversion | 100.95% | ||
| Profit Quality | 137.92% | ||
| Current Ratio | 1.72 | ||
| Quick Ratio | 1.18 | ||
| Altman-Z | 5.21 |
F-Score8
WACC8.63%
ROIC/WACC1.69
Cap/Depr(3y)81.09%
Cap/Depr(5y)77.42%
Cap/Sales(3y)2.85%
Cap/Sales(5y)3.08%
Profit Quality(3y)89.51%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)27.96%
EPS 3Y83.51%
EPS 5Y7.5%
EPS Q2Q%20.95%
EPS Next Y17.48%
EPS Next 2Y14.84%
EPS Next 3Y14.58%
EPS Next 5Y9.96%
Revenue 1Y (TTM)3.65%
Revenue growth 3Y14.65%
Revenue growth 5Y0.99%
Sales Q2Q%5.7%
Revenue Next Year3.65%
Revenue Next 2Y4.04%
Revenue Next 3Y4.01%
Revenue Next 5Y3.69%
EBIT growth 1Y16.56%
EBIT growth 3Y60.62%
EBIT growth 5Y2.65%
EBIT Next Year42%
EBIT Next 3Y19.1%
EBIT Next 5Y12.46%
FCF growth 1Y1324.62%
FCF growth 3Y49.08%
FCF growth 5Y9.08%
OCF growth 1Y333.99%
OCF growth 3Y41.09%
OCF growth 5Y6.42%