RALPH LAUREN CORP (RL) Stock Fundamental Analysis
NYSE:RL - New York Stock Exchange, Inc. - US7512121010 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to RL. RL was compared to 49 industry peers in the Textiles, Apparel & Luxury Goods industry. RL scores excellent points on both the profitability and health parts. This is a solid base for a good stock. RL is quite expensive at the moment. It does show a decent growth rate. These ratings could make RL a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year RL was profitable.
RL had a positive operating cash flow in the past year.
RL had positive earnings in 4 of the past 5 years.
RL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.54%, RL belongs to the top of the industry, outperforming 83.67% of the companies in the same industry.
With an excellent Return On Equity value of 28.70%, RL belongs to the best of the industry, outperforming 83.67% of the companies in the same industry.
The Return On Invested Capital of RL (16.25%) is better than 79.59% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for RL is above the industry average of 11.45%.
The last Return On Invested Capital (16.25%) for RL is above the 3 year average (13.65%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.54% | ||
| ROE | 28.7% | ||
| ROIC | 16.25% |
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 (10.49%) than 87.76% of its industry peers.
In the last couple of years the Profit Margin of RL has grown nicely.
The Operating Margin of RL (13.98%) is better than 83.67% of its industry peers.
RL's Operating Margin has improved in the last couple of years.
RL has a better Gross Margin (68.55%) than 93.88% of its industry peers.
In the last couple of years the Gross Margin of RL has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.98% | ||
| PM (TTM) | 10.49% | ||
| GM | 68.55% |
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 well above the Cost of Capital (WACC), which means it is creating 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 5.58 indicates that RL is not in any danger for bankruptcy at the moment.
RL's Altman-Z score of 5.58 is amongst the best of the industry. RL outperforms 89.80% of its industry peers.
RL has a debt to FCF ratio of 1.37. This is a very positive value and a sign of high solvency as it would only need 1.37 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 1.37, RL belongs to the best of the industry, outperforming 81.63% of the companies in the same industry.
RL has a Debt/Equity ratio of 0.38. This is a healthy value indicating a solid balance between debt and equity.
RL has a Debt to Equity ratio (0.38) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 1.37 | ||
| Altman-Z | 5.58 |
ROIC/WACC1.86
WACC8.72%
2.3 Liquidity
A Current Ratio of 1.78 indicates that RL should not have too much problems paying its short term obligations.
RL has a Current ratio of 1.78. This is in the lower half of the industry: RL underperforms 61.22% of its industry peers.
RL has a Quick Ratio of 1.33. 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 (1.33) which is comparable to the rest of the 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 | 1.78 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 19.48% over the past year.
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 been growing slightly by 6.75% in the past year.
RL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.82% yearly.
EPS 1Y (TTM)19.48%
EPS 3Y13.92%
EPS 5Y13.66%
EPS Q2Q%32.75%
Revenue 1Y (TTM)6.75%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%8.25%
3.2 Future
The Earnings Per Share is expected to grow by 9.64% 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 4.56% on average per year.
EPS Next Y15.26%
EPS Next 2Y12.77%
EPS Next 3Y12.28%
EPS Next 5Y9.64%
Revenue Next Year5.25%
Revenue Next 2Y4.95%
Revenue Next 3Y5.11%
Revenue Next 5Y4.56%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
Based on the Price/Earnings ratio of 23.18, the valuation of RL can be described as rather expensive.
RL's Price/Earnings is on the same level as the industry average.
RL is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.29, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 20.11, which indicates a rather expensive current valuation of RL.
RL's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.74, RL is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.18 | ||
| Fwd PE | 20.11 |
4.2 Price Multiples
RL's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as RL.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.92 | ||
| EV/EBITDA | 13.55 |
4.3 Compensation for Growth
RL's 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 12.28% in the coming years.
PEG (NY)1.52
PEG (5Y)1.7
EPS Next 2Y12.77%
EPS Next 3Y12.28%
5. Dividend
5.1 Amount
RL has a Yearly Dividend Yield of 1.30%. Purely for dividend investing, there may be better candidates out there.
RL's Dividend Yield is a higher than the industry average which is at 3.62.
With a Dividend Yield of 1.30, RL pays less dividend than the S&P500 average, which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.3% |
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 27.07% 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.
DP27.07%
EPS Next 2Y12.77%
EPS Next 3Y12.28%
285.81
+6 (+2.14%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners108.04%
Inst Owner Change-0.34%
Ins Owners2.34%
Ins Owner Change7.08%
Market Cap17.24B
Analysts80
Price Target320.97 (12.3%)
Short Float %4.63%
Short Ratio2.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.3% |
Yearly Dividend3.22
Dividend Growth(5Y)3.54%
DP27.07%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.08%
Min EPS beat(2)4.24%
Max EPS beat(2)9.93%
EPS beat(4)4
Avg EPS beat(4)5.67%
Min EPS beat(4)2.48%
Max EPS beat(4)9.93%
EPS beat(8)7
Avg EPS beat(8)6.14%
EPS beat(12)11
Avg EPS beat(12)9.23%
EPS beat(16)15
Avg EPS beat(16)22.13%
Revenue beat(2)2
Avg Revenue beat(2)1.74%
Min Revenue beat(2)0.14%
Max Revenue beat(2)3.35%
Revenue beat(4)2
Avg Revenue beat(4)0.49%
Min Revenue beat(4)-1.42%
Max Revenue beat(4)3.35%
Revenue beat(8)3
Avg Revenue beat(8)-0.41%
Revenue beat(12)6
Avg Revenue beat(12)0.03%
Revenue beat(16)9
Avg Revenue beat(16)1.14%
PT rev (1m)15.88%
PT rev (3m)6.83%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)13.28%
EPS NY rev (1m)2.05%
EPS NY rev (3m)0.22%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.05%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)0.99%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.18 | ||
| Fwd PE | 20.11 | ||
| P/S | 2.44 | ||
| P/FCF | 16.92 | ||
| P/OCF | 13.96 | ||
| P/B | 6.66 | ||
| P/tB | 10.53 | ||
| EV/EBITDA | 13.55 |
EPS(TTM)12.33
EY4.31%
EPS(NY)14.21
Fwd EY4.97%
FCF(TTM)16.89
FCFY5.91%
OCF(TTM)20.48
OCFY7.16%
SpS117.36
BVpS42.91
TBVpS27.14
PEG (NY)1.52
PEG (5Y)1.7
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.54% | ||
| ROE | 28.7% | ||
| ROCE | 20.15% | ||
| ROIC | 16.25% | ||
| ROICexc | 28.2% | ||
| ROICexgc | 42.48% | ||
| OM | 13.98% | ||
| PM (TTM) | 10.49% | ||
| GM | 68.55% | ||
| FCFM | 14.39% |
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%
ROICexcg growth 3Y5.94%
ROICexcg 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
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 1.37 | ||
| Debt/EBITDA | 0.81 | ||
| Cap/Depr | 98.45% | ||
| Cap/Sales | 3.05% | ||
| Interest Coverage | 23.91 | ||
| Cash Conversion | 102.12% | ||
| Profit Quality | 137.15% | ||
| Current Ratio | 1.78 | ||
| Quick Ratio | 1.33 | ||
| Altman-Z | 5.58 |
F-Score8
WACC8.72%
ROIC/WACC1.86
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)19.48%
EPS 3Y13.92%
EPS 5Y13.66%
EPS Q2Q%32.75%
EPS Next Y15.26%
EPS Next 2Y12.77%
EPS Next 3Y12.28%
EPS Next 5Y9.64%
Revenue 1Y (TTM)6.75%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%8.25%
Revenue Next Year5.25%
Revenue Next 2Y4.95%
Revenue Next 3Y5.11%
Revenue Next 5Y4.56%
EBIT growth 1Y19.25%
EBIT growth 3Y6.32%
EBIT growth 5Y19.59%
EBIT Next Year33.73%
EBIT Next 3Y16.17%
EBIT Next 5Y11.18%
FCF growth 1Y12.6%
FCF growth 3Y22.89%
FCF growth 5Y16.04%
OCF growth 1Y15.46%
OCF growth 3Y19.94%
OCF growth 5Y10.36%