RALPH LAUREN CORP (RL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RL - US7512121010 - Common Stock
362.53 USD
-7.53 (-2.03%)
363.01 USD
+0.48 (+0.13%)
RL gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 45 industry peers in the Textiles, Apparel & Luxury Goods industry. RL gets an excellent profitability rating and is at the same time showing great financial health properties. 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.
RL had a positive operating cash flow in the past year.
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 has a Return On Assets of 11.63%. This is amongst the best in the industry. RL outperforms 91.11% of its industry peers.
Looking at the Return On Equity, with a value of 33.08%, RL belongs to the top of the industry, outperforming 88.89% of the companies in the same industry.
RL's Return On Invested Capital of 16.88% is amongst the best of the industry. RL outperforms 86.67% of its industry peers.
The Average Return On Invested Capital over the past 3 years for RL is in line with the industry average of 11.73%.
The last Return On Invested Capital (16.88%) for RL is above the 3 year average (13.65%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.63% | ||
| ROE | 33.08% | ||
| ROIC | 16.88% |
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 Profit Margin of 11.28%. This is amongst the best in the industry. RL outperforms 91.11% of its industry peers.
In the last couple of years the Profit Margin of RL has grown nicely.
RL has a Operating Margin of 15.22%. This is amongst the best in the industry. RL outperforms 86.67% of its industry peers.
In the last couple of years the Operating Margin of RL has grown nicely.
The Gross Margin of RL (69.22%) is better than 95.56% of its industry peers.
In the last couple of years the Gross Margin of RL has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.22% | ||
| PM (TTM) | 11.28% | ||
| GM | 69.22% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), RL is creating some value.
RL has less shares outstanding than it did 1 year ago.
The number of shares outstanding for RL has been reduced compared to 5 years ago.
Compared to 1 year ago, RL has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 6.13 indicates that RL is not in any danger for bankruptcy at the moment.
RL has a Altman-Z score of 6.13. This is amongst the best in the industry. RL outperforms 91.11% of its industry peers.
RL has a debt to FCF ratio of 2.22. This is a good value and a sign of high solvency as RL would need 2.22 years to pay back of all of its debts.
RL has a Debt to FCF ratio of 2.22. This is in the better half of the industry: RL outperforms 75.56% of its industry peers.
RL has a Debt/Equity ratio of 0.57. This is a neutral value indicating RL is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.57, RL is not doing good in the industry: 62.22% of the companies in the same industry are doing better.
Even though the debt/equity ratio score it not favorable for RL, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 2.22 | ||
| Altman-Z | 6.13 |
ROIC/WACC1.52
WACC11.07%
2.3 Liquidity
RL has a Current Ratio of 2.04. This indicates that RL is financially healthy and has no problem in meeting its short term obligations.
RL's Current ratio of 2.04 is in line compared to the rest of the industry. RL outperforms 55.56% of its industry peers.
RL has a Quick Ratio of 1.35. This is a normal value and indicates that RL is financially healthy and should not expect problems in meeting its short term obligations.
RL has a Quick ratio of 1.35. This is in the better half of the industry: RL outperforms 68.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.04 | ||
| Quick Ratio | 1.35 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 31.74% over the past year.
RL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.66% yearly.
Looking at the last year, RL shows a quite strong growth in Revenue. The Revenue has grown by 12.32% in the last year.
The Revenue has been growing slightly by 2.82% on average over the past years.
EPS 1Y (TTM)31.74%
EPS 3Y13.92%
EPS 5Y13.66%
EPS Q2Q%49.21%
Revenue 1Y (TTM)12.32%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%16.49%
3.2 Future
Based on estimates for the next years, RL will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.46% on average per year.
RL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.98% yearly.
EPS Next Y28.71%
EPS Next 2Y18.51%
EPS Next 3Y16.36%
EPS Next 5Y12.46%
Revenue Next Year10.44%
Revenue Next 2Y7.7%
Revenue Next 3Y6.85%
Revenue Next 5Y5.98%
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 stable.
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
A Price/Earnings ratio of 24.75 indicates a rather expensive valuation of RL.
The rest of the industry has a similar Price/Earnings ratio as RL.
The average S&P500 Price/Earnings ratio is at 26.39. RL is around the same levels.
With a Price/Forward Earnings ratio of 20.94, RL is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward 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/Forward Earnings ratio to 23.84, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.75 | ||
| Fwd PE | 20.94 |
4.2 Price Multiples
60.00% of the companies in the same industry are cheaper than RL, based on the Enterprise Value to EBITDA ratio.
RL's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.92 | ||
| EV/EBITDA | 15.73 |
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.
A more expensive valuation may be justified as RL's earnings are expected to grow with 16.36% in the coming years.
PEG (NY)0.86
PEG (5Y)1.81
EPS Next 2Y18.51%
EPS Next 3Y16.36%
5. Dividend
5.1 Amount
With a yearly dividend of 0.99%, RL is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.50, RL has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 1.87, RL's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
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
24.37% of the earnings are spent on dividend by RL. This is a low number and sustainable payout ratio.
The dividend of RL is growing, but earnings are growing more, so the dividend growth is sustainable.
DP24.37%
EPS Next 2Y18.51%
EPS Next 3Y16.36%
362.53
-7.53 (-2.03%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners101.25%
Inst Owner Change-2.44%
Ins Owners3.55%
Ins Owner Change-0.18%
Market Cap21.98B
Revenue(TTM)7.57B
Net Income(TTM)854.30M
Analysts82.96
Price Target381.64 (5.27%)
Short Float %5.02%
Short Ratio3.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
Yearly Dividend3.22
Dividend Growth(5Y)3.54%
DP24.37%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.8%
Min EPS beat(2)4.63%
Max EPS beat(2)6.97%
EPS beat(4)4
Avg EPS beat(4)6.44%
Min EPS beat(4)4.24%
Max EPS beat(4)9.93%
EPS beat(8)7
Avg EPS beat(8)6.07%
EPS beat(12)11
Avg EPS beat(12)9.5%
EPS beat(16)15
Avg EPS beat(16)11.6%
Revenue beat(2)2
Avg Revenue beat(2)2.05%
Min Revenue beat(2)0.77%
Max Revenue beat(2)3.32%
Revenue beat(4)4
Avg Revenue beat(4)1.89%
Min Revenue beat(4)0.14%
Max Revenue beat(4)3.35%
Revenue beat(8)5
Avg Revenue beat(8)0.51%
Revenue beat(12)7
Avg Revenue beat(12)0.28%
Revenue beat(16)10
Avg Revenue beat(16)0.81%
PT rev (1m)6.78%
PT rev (3m)11.19%
EPS NQ rev (1m)0.11%
EPS NQ rev (3m)8.37%
EPS NY rev (1m)3.2%
EPS NY rev (3m)3.48%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)4.08%
Revenue NY rev (1m)2.15%
Revenue NY rev (3m)2.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.75 | ||
| Fwd PE | 20.94 | ||
| P/S | 2.9 | ||
| P/FCF | 32.92 | ||
| P/OCF | 20.17 | ||
| P/B | 8.51 | ||
| P/tB | 13.62 | ||
| EV/EBITDA | 15.73 |
EPS(TTM)14.65
EY4.04%
EPS(NY)17.32
Fwd EY4.78%
FCF(TTM)11.01
FCFY3.04%
OCF(TTM)17.97
OCFY4.96%
SpS124.84
BVpS42.58
TBVpS26.61
PEG (NY)0.86
PEG (5Y)1.81
Graham Number118.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.63% | ||
| ROE | 33.08% | ||
| ROCE | 20.93% | ||
| ROIC | 16.88% | ||
| ROICexc | 24.07% | ||
| ROICexgc | 32.12% | ||
| OM | 15.22% | ||
| PM (TTM) | 11.28% | ||
| GM | 69.22% | ||
| FCFM | 8.82% |
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-Score8
Asset Turnover1.03
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 2.22 | ||
| Debt/EBITDA | 1.06 | ||
| Cap/Depr | 190.35% | ||
| Cap/Sales | 5.58% | ||
| Interest Coverage | 28.32 | ||
| Cash Conversion | 79.3% | ||
| Profit Quality | 78.16% | ||
| Current Ratio | 2.04 | ||
| Quick Ratio | 1.35 | ||
| Altman-Z | 6.13 |
F-Score8
WACC11.07%
ROIC/WACC1.52
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)31.74%
EPS 3Y13.92%
EPS 5Y13.66%
EPS Q2Q%49.21%
EPS Next Y28.71%
EPS Next 2Y18.51%
EPS Next 3Y16.36%
EPS Next 5Y12.46%
Revenue 1Y (TTM)12.32%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%16.49%
Revenue Next Year10.44%
Revenue Next 2Y7.7%
Revenue Next 3Y6.85%
Revenue Next 5Y5.98%
EBIT growth 1Y32.83%
EBIT growth 3Y6.32%
EBIT growth 5Y19.59%
EBIT Next Year47.11%
EBIT Next 3Y19.6%
EBIT Next 5Y14.06%
FCF growth 1Y24.41%
FCF growth 3Y22.89%
FCF growth 5Y16.04%
OCF growth 1Y44.8%
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 24.75 and the Price/Book (PB) ratio is 8.51.
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 28.71% in the next year.