RALPH LAUREN CORP (RL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RL - US7512121010 - Common Stock
371.22 USD
+6.72 (+1.84%)
371.22 USD
0 (0%)
Taking everything into account, RL scores 7 out of 10 in our fundamental rating. RL was compared to 46 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. While showing a medium growth rate, RL is valued expensive at the moment. These ratings could make RL a good candidate 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
Looking at the Return On Assets, with a value of 11.63%, RL belongs to the top of the industry, outperforming 91.30% of the companies in the same industry.
RL's Return On Equity of 33.08% is amongst the best of the industry. RL outperforms 86.96% of its industry peers.
The Return On Invested Capital of RL (16.88%) is better than 84.78% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for RL is in line with the industry average of 11.99%.
The 3 year average ROIC (13.65%) for RL is below the current ROIC(16.88%), indicating increased profibility in the last year.
| 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 91.30% of its industry peers.
RL's Profit Margin has improved in the last couple of years.
The Operating Margin of RL (15.22%) is better than 86.96% of its industry peers.
RL's Operating Margin has improved in the last couple of years.
RL's Gross Margin of 69.22% is amongst the best of the industry. RL outperforms 95.65% 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.
Compared to 1 year ago, RL has less shares outstanding
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
An Altman-Z score of 6.20 indicates that RL is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 6.20, RL belongs to the best of the industry, outperforming 91.30% of the companies in the same industry.
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's Debt to FCF ratio of 2.22 is fine compared to the rest of the industry. RL outperforms 76.09% 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.
The Debt to Equity ratio of RL (0.57) is worse than 60.87% of its industry peers.
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 | 0.57 | ||
| Debt/FCF | 2.22 | ||
| Altman-Z | 6.2 |
ROIC/WACC1.59
WACC10.61%
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.
With a Current ratio value of 2.04, RL perfoms like the industry average, outperforming 58.70% of the companies in the same industry.
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 better Quick ratio (1.35) than 73.91% 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.
RL shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.32%.
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
RL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.46% yearly.
The Revenue is expected to grow by 5.98% on average over the next years.
EPS Next Y24.73%
EPS Next 2Y16.58%
EPS Next 3Y16.21%
EPS Next 5Y12.46%
Revenue Next Year8.12%
Revenue Next 2Y6.48%
Revenue Next 3Y6.77%
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
With a Price/Earnings ratio of 25.34, RL can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as RL.
RL is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.15, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 22.15, the valuation of RL can be described as rather expensive.
RL's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. RL is more expensive than 60.87% of the companies in the same industry.
RL's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.12.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.34 | ||
| Fwd PE | 22.15 |
4.2 Price Multiples
63.04% 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 ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.71 | ||
| EV/EBITDA | 16.11 |
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.
RL's earnings are expected to grow with 16.21% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.02
PEG (5Y)1.85
EPS Next 2Y16.58%
EPS Next 3Y16.21%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.12%, RL has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.52, RL pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.12, RL pays less dividend than the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.12% |
5.2 History
The dividend of RL has a limited annual growth rate of 3.54%.
RL has been paying a dividend for at least 10 years, so it has 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 2Y16.58%
EPS Next 3Y16.21%
371.22
+6.72 (+1.84%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners105.4%
Inst Owner Change-2.45%
Ins Owners3.55%
Ins Owner Change10.33%
Market Cap22.51B
Revenue(TTM)7.57B
Net Income(TTM)854.30M
Analysts82.96
Price Target371 (-0.06%)
Short Float %4.12%
Short Ratio2.58
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.12% |
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)6.64%
PT rev (3m)9.43%
EPS NQ rev (1m)7.81%
EPS NQ rev (3m)8.25%
EPS NY rev (1m)0.2%
EPS NY rev (3m)8.27%
Revenue NQ rev (1m)3.31%
Revenue NQ rev (3m)4.04%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)2.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.34 | ||
| Fwd PE | 22.15 | ||
| P/S | 2.97 | ||
| P/FCF | 33.71 | ||
| P/OCF | 20.65 | ||
| P/B | 8.72 | ||
| P/tB | 13.95 | ||
| EV/EBITDA | 16.11 |
EPS(TTM)14.65
EY3.95%
EPS(NY)16.76
Fwd EY4.51%
FCF(TTM)11.01
FCFY2.97%
OCF(TTM)17.97
OCFY4.84%
SpS124.84
BVpS42.58
TBVpS26.61
PEG (NY)1.02
PEG (5Y)1.85
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 | 6.2 |
F-Score8
WACC10.61%
ROIC/WACC1.59
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 Y24.73%
EPS Next 2Y16.58%
EPS Next 3Y16.21%
EPS Next 5Y12.46%
Revenue 1Y (TTM)12.32%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%16.49%
Revenue Next Year8.12%
Revenue Next 2Y6.48%
Revenue Next 3Y6.77%
Revenue Next 5Y5.98%
EBIT growth 1Y32.83%
EBIT growth 3Y6.32%
EBIT growth 5Y19.59%
EBIT Next Year41.82%
EBIT Next 3Y19.48%
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 3 / 10 to RALPH LAUREN CORP (RL). This can be considered as Overvalued.
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 25.34 and the Price/Book (PB) ratio is 8.72.
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 24.73% in the next year.