RALPH LAUREN CORP (RL) Stock Fundamental Analysis
USA - NYSE:RL - US7512121010 - Common Stock
316.9 USD
+7.61 (+2.46%)
316 USD
-0.9 (-0.28%)
Taking everything into account, RL scores 7 out of 10 in our fundamental rating. RL was compared to 48 industry peers in the Textiles, Apparel & Luxury Goods industry. Both the health and profitability get an excellent rating, making RL a very profitable company, without any liquidiy or solvency issues. RL has a correct valuation and a medium growth rate. These ratings would make RL suitable 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.
In the past 5 years RL always reported a positive cash flow from operatings.
1.2 Ratios
RL has a better Return On Assets (10.25%) than 89.58% of its industry peers.
Looking at the Return On Equity, with a value of 31.59%, RL belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 15.74%, RL belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for RL is in line with the industry average of 12.15%.
The 3 year average ROIC (13.65%) for RL is below the current ROIC(15.74%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.25% | ||
| ROE | 31.59% | ||
| ROIC | 15.74% |
ROA(3y)9.34%
ROA(5y)6.85%
ROE(3y)25.53%
ROE(5y)19.12%
ROIC(3y)13.65%
ROIC(5y)11.13%
1.3 Margins
RL has a better Profit Margin (10.91%) than 91.67% of its industry peers.
RL's Profit Margin has improved in the last couple of years.
RL's Operating Margin of 14.64% is amongst the best of the industry. RL outperforms 87.50% of its industry peers.
In the last couple of years the Operating Margin of RL has grown nicely.
RL's Gross Margin of 69.03% is amongst the best of the industry. RL outperforms 95.83% of its industry peers.
RL's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.64% | ||
| PM (TTM) | 10.91% | ||
| GM | 69.03% |
OM growth 3Y1.83%
OM growth 5Y16.31%
PM growth 3Y2.83%
PM growth 5Y10.96%
GM growth 3Y0.92%
GM growth 5Y2.93%
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.
Compared to 1 year ago, RL has less shares outstanding
The number of shares outstanding for RL has been reduced compared to 5 years ago.
The debt/assets ratio for RL has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.24 indicates that RL is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 5.24, RL belongs to the best of the industry, outperforming 89.58% of the companies in the same industry.
RL has a debt to FCF ratio of 2.47. This is a good value and a sign of high solvency as RL would need 2.47 years to pay back of all of its debts.
RL has a Debt to FCF ratio of 2.47. This is in the better half of the industry: RL outperforms 77.08% of its industry peers.
A Debt/Equity ratio of 0.58 indicates that RL is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.58, RL is not doing good in the industry: 60.42% of the companies in the same industry are doing better.
Although RL does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 2.47 | ||
| Altman-Z | 5.24 |
ROIC/WACC1.48
WACC10.63%
2.3 Liquidity
A Current Ratio of 1.84 indicates that RL should not have too much problems paying its short term obligations.
RL's Current ratio of 1.84 is in line compared to the rest of the industry. RL outperforms 47.92% of its industry peers.
A Quick Ratio of 1.30 indicates that RL should not have too much problems paying its short term obligations.
The Quick ratio of RL (1.30) is better than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.84 | ||
| Quick Ratio | 1.3 |
3. Growth
3.1 Past
RL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.47%, which is quite impressive.
Measured over the past years, RL shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.66% on average per year.
The Revenue has grown by 9.61% in the past year. This is quite good.
RL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.82% yearly.
EPS 1Y (TTM)25.47%
EPS 3Y13.92%
EPS 5Y13.66%
EPS Q2Q%39.63%
Revenue 1Y (TTM)9.61%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%13.68%
3.2 Future
RL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.84% yearly.
RL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.86% yearly.
EPS Next Y24.48%
EPS Next 2Y16.42%
EPS Next 3Y14.91%
EPS Next 5Y8.84%
Revenue Next Year8.03%
Revenue Next 2Y6.42%
Revenue Next 3Y6.04%
Revenue Next 5Y3.86%
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 decreasing.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
RL is valuated rather expensively with a Price/Earnings ratio of 23.65.
Compared to the rest of the industry, the Price/Earnings ratio of RL is on the same level as its industry peers.
RL is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.13, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 18.96, which indicates a rather expensive current 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.
RL's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.65 | ||
| Fwd PE | 18.96 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RL is valued a bit more expensive than 60.42% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RL is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.13 | ||
| EV/EBITDA | 14.1 |
4.3 Compensation for Growth
RL's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of RL may justify a higher PE ratio.
RL's earnings are expected to grow with 14.91% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.97
PEG (5Y)1.73
EPS Next 2Y16.42%
EPS Next 3Y14.91%
5. Dividend
5.1 Amount
RL has a Yearly Dividend Yield of 1.13%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.34, RL pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.39, RL's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.13% |
5.2 History
The dividend of RL has a limited annual growth rate of 3.54%.
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)3.54%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
RL pays out 25.71% of its income as dividend. This is a sustainable payout ratio.
RL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP25.71%
EPS Next 2Y16.42%
EPS Next 3Y14.91%
316.9
+7.61 (+2.46%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners105.4%
Inst Owner Change0.86%
Ins Owners3.55%
Ins Owner Change9.79%
Market Cap19.19B
Revenue(TTM)7.29B
Net Income(TTM)794.70M
Analysts82.31
Price Target357.41 (12.78%)
Short Float %3.68%
Short Ratio2.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.13% |
Yearly Dividend3.22
Dividend Growth(5Y)3.54%
DP25.71%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.28%
Min EPS beat(2)4.63%
Max EPS beat(2)9.93%
EPS beat(4)4
Avg EPS beat(4)5.32%
Min EPS beat(4)2.48%
Max EPS beat(4)9.93%
EPS beat(8)7
Avg EPS beat(8)5.9%
EPS beat(12)11
Avg EPS beat(12)9.25%
EPS beat(16)15
Avg EPS beat(16)12.88%
Revenue beat(2)2
Avg Revenue beat(2)0.45%
Min Revenue beat(2)0.14%
Max Revenue beat(2)0.77%
Revenue beat(4)3
Avg Revenue beat(4)1.03%
Min Revenue beat(4)-0.12%
Max Revenue beat(4)3.35%
Revenue beat(8)4
Avg Revenue beat(8)-0.07%
Revenue beat(12)6
Avg Revenue beat(12)-0.13%
Revenue beat(16)9
Avg Revenue beat(16)0.57%
PT rev (1m)4.13%
PT rev (3m)12.07%
EPS NQ rev (1m)0.45%
EPS NQ rev (3m)21.2%
EPS NY rev (1m)0.08%
EPS NY rev (3m)8.06%
Revenue NQ rev (1m)0.15%
Revenue NQ rev (3m)4.51%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)2.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.65 | ||
| Fwd PE | 18.96 | ||
| P/S | 2.63 | ||
| P/FCF | 25.13 | ||
| P/OCF | 16.93 | ||
| P/B | 7.63 | ||
| P/tB | 12.45 | ||
| EV/EBITDA | 14.1 |
EPS(TTM)13.4
EY4.23%
EPS(NY)16.71
Fwd EY5.27%
FCF(TTM)12.61
FCFY3.98%
OCF(TTM)18.72
OCFY5.91%
SpS120.29
BVpS41.53
TBVpS25.45
PEG (NY)0.97
PEG (5Y)1.73
Graham Number111.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.25% | ||
| ROE | 31.59% | ||
| ROCE | 19.52% | ||
| ROIC | 15.74% | ||
| ROICexc | 26.98% | ||
| ROICexgc | 38.84% | ||
| OM | 14.64% | ||
| PM (TTM) | 10.91% | ||
| GM | 69.03% | ||
| FCFM | 10.48% |
ROA(3y)9.34%
ROA(5y)6.85%
ROE(3y)25.53%
ROE(5y)19.12%
ROIC(3y)13.65%
ROIC(5y)11.13%
ROICexc(3y)21.58%
ROICexc(5y)18.48%
ROICexgc(3y)31.01%
ROICexgc(5y)27.05%
ROCE(3y)16.93%
ROCE(5y)13.8%
ROICexgc growth 3Y5.94%
ROICexgc growth 5Y26.51%
ROICexc growth 3Y6.82%
ROICexc growth 5Y25.11%
OM growth 3Y1.83%
OM growth 5Y16.31%
PM growth 3Y2.83%
PM growth 5Y10.96%
GM growth 3Y0.92%
GM growth 5Y2.93%
F-Score6
Asset Turnover0.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 2.47 | ||
| Debt/EBITDA | 1.14 | ||
| Cap/Depr | 167.69% | ||
| Cap/Sales | 5.08% | ||
| Interest Coverage | 28 | ||
| Cash Conversion | 88.06% | ||
| Profit Quality | 96.11% | ||
| Current Ratio | 1.84 | ||
| Quick Ratio | 1.3 | ||
| Altman-Z | 5.24 |
F-Score6
WACC10.63%
ROIC/WACC1.48
Cap/Depr(3y)89.69%
Cap/Depr(5y)77.05%
Cap/Sales(3y)2.97%
Cap/Sales(5y)2.81%
Profit Quality(3y)104.73%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)25.47%
EPS 3Y13.92%
EPS 5Y13.66%
EPS Q2Q%39.63%
EPS Next Y24.48%
EPS Next 2Y16.42%
EPS Next 3Y14.91%
EPS Next 5Y8.84%
Revenue 1Y (TTM)9.61%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%13.68%
Revenue Next Year8.03%
Revenue Next 2Y6.42%
Revenue Next 3Y6.04%
Revenue Next 5Y3.86%
EBIT growth 1Y26.7%
EBIT growth 3Y6.32%
EBIT growth 5Y19.59%
EBIT Next Year41.82%
EBIT Next 3Y18.09%
EBIT Next 5Y10.4%
FCF growth 1Y82.42%
FCF growth 3Y22.89%
FCF growth 5Y16.04%
OCF growth 1Y78.17%
OCF growth 3Y19.94%
OCF growth 5Y10.36%
RALPH LAUREN CORP / RL FAQ
What is the ChartMill fundamental rating of RALPH LAUREN CORP (RL) stock?
ChartMill assigns a fundamental rating of 7 / 10 to RL.
What is the valuation status for RL stock?
ChartMill assigns a valuation rating of 4 / 10 to RALPH LAUREN CORP (RL). This can be considered as Fairly Valued.
How profitable is RALPH LAUREN CORP (RL) stock?
RALPH LAUREN CORP (RL) has a profitability rating of 9 / 10.
Can you provide the PE and PB ratios for RL stock?
The Price/Earnings (PE) ratio for RALPH LAUREN CORP (RL) is 23.65 and the Price/Book (PB) ratio is 7.63.
Can you provide the expected EPS growth for RL stock?
The Earnings per Share (EPS) of RALPH LAUREN CORP (RL) is expected to grow by 24.48% in the next year.