RALPH LAUREN CORP (RL) Stock Fundamental Analysis
USA - NYSE:RL - US7512121010 - Common Stock
313.98 USD
+7.86 (+2.57%)
313.98 USD
0 (0%)
Overall RL gets a fundamental rating of 7 out of 10. We evaluated RL against 49 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.
RL had a positive operating cash flow in the past year.
Of the past 5 years RL 4 years were profitable.
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 10.25%, RL belongs to the top of the industry, outperforming 89.80% of the companies in the same industry.
The Return On Equity of RL (31.59%) is better than 87.76% of its industry peers.
RL has a better Return On Invested Capital (15.74%) than 83.67% of its industry peers.
RL had an Average Return On Invested Capital over the past 3 years of 13.65%. This is in line with the industry average of 12.08%.
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
Looking at the Profit Margin, with a value of 10.91%, RL belongs to the top of the industry, outperforming 91.84% of the companies in the same industry.
RL's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 14.64%, RL belongs to the best of the industry, outperforming 87.76% of the companies in the same industry.
In the last couple of years the Operating Margin of RL has grown nicely.
RL has a better Gross Margin (69.03%) than 95.92% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so RL is still 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
Compared to 1 year ago, RL has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.27 indicates that RL is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 5.27, RL belongs to the best of the industry, outperforming 87.76% of the companies in the same industry.
The Debt to FCF ratio of RL is 2.47, which is a good value as it means it would take RL, 2.47 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 2.47, RL is doing good in the industry, outperforming 77.55% of the companies in the same industry.
A Debt/Equity ratio of 0.58 indicates that RL is somewhat dependend on debt financing.
RL has a Debt to Equity ratio of 0.58. This is comparable to the rest of the industry: RL outperforms 40.82% 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 | 0.58 | ||
| Debt/FCF | 2.47 | ||
| Altman-Z | 5.27 |
ROIC/WACC1.55
WACC10.13%
2.3 Liquidity
RL has a Current Ratio of 1.84. 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 Current ratio of 1.84. This is comparable to the rest of the industry: RL outperforms 48.98% of its industry peers.
A Quick Ratio of 1.30 indicates that RL should not have too much problems paying its short term obligations.
RL's Quick ratio of 1.30 is fine compared to the rest of the industry. RL outperforms 67.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.84 | ||
| Quick Ratio | 1.3 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 25.47% 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 9.61%.
Measured over the past years, RL shows a small growth in Revenue. The Revenue has been growing by 2.82% on average per year.
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
The Earnings Per Share is expected to grow by 10.92% 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 5.06% on average per year.
EPS Next Y24.3%
EPS Next 2Y16.36%
EPS Next 3Y14.21%
EPS Next 5Y10.92%
Revenue Next Year7.85%
Revenue Next 2Y6.31%
Revenue Next 3Y5.88%
Revenue Next 5Y5.06%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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
With a Price/Earnings ratio of 23.43, RL is valued on the expensive side.
The rest of the industry has a similar Price/Earnings ratio as RL.
RL's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.41.
Based on the Price/Forward Earnings ratio of 18.81, the valuation of RL can be described as rather expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as RL.
RL's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.43 | ||
| Fwd PE | 18.81 |
4.2 Price Multiples
RL's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. RL is more expensive than 61.22% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RL indicates a somewhat cheap valuation: RL is cheaper than 63.27% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.9 | ||
| EV/EBITDA | 14.32 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap 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 14.21% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.96
PEG (5Y)1.72
EPS Next 2Y16.36%
EPS Next 3Y14.21%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.15%, RL has a reasonable but not impressive dividend return.
RL's Dividend Yield is a higher than the industry average which is at 3.08.
Compared to an average S&P500 Dividend Yield of 2.38, RL's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
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
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 2Y16.36%
EPS Next 3Y14.21%
313.98
+7.86 (+2.57%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners107.01%
Inst Owner Change-3.37%
Ins Owners3.58%
Ins Owner Change7.2%
Market Cap19.02B
Analysts82.31
Price Target343.23 (9.32%)
Short Float %4.2%
Short Ratio2.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
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)1.24%
PT rev (3m)6.94%
EPS NQ rev (1m)0%
EPS NQ rev (3m)22.81%
EPS NY rev (1m)7.9%
EPS NY rev (3m)10.06%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)6.25%
Revenue NY rev (1m)2.35%
Revenue NY rev (3m)2.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.43 | ||
| Fwd PE | 18.81 | ||
| P/S | 2.61 | ||
| P/FCF | 24.9 | ||
| P/OCF | 16.77 | ||
| P/B | 7.56 | ||
| P/tB | 12.34 | ||
| EV/EBITDA | 14.32 |
EPS(TTM)13.4
EY4.27%
EPS(NY)16.7
Fwd EY5.32%
FCF(TTM)12.61
FCFY4.02%
OCF(TTM)18.72
OCFY5.96%
SpS120.29
BVpS41.53
TBVpS25.45
PEG (NY)0.96
PEG (5Y)1.72
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%
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-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 | 5.27 |
F-Score6
WACC10.13%
ROIC/WACC1.55
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 Y24.3%
EPS Next 2Y16.36%
EPS Next 3Y14.21%
EPS Next 5Y10.92%
Revenue 1Y (TTM)9.61%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%13.68%
Revenue Next Year7.85%
Revenue Next 2Y6.31%
Revenue Next 3Y5.88%
Revenue Next 5Y5.06%
EBIT growth 1Y26.7%
EBIT growth 3Y6.32%
EBIT growth 5Y19.59%
EBIT Next Year35.63%
EBIT Next 3Y17.15%
EBIT Next 5Y12.35%
FCF growth 1Y82.42%
FCF growth 3Y22.89%
FCF growth 5Y16.04%
OCF growth 1Y78.17%
OCF growth 3Y19.94%
OCF growth 5Y10.36%