RALPH LAUREN CORP (RL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RL - US7512121010 - Common Stock
363.25 USD
-6.56 (-1.77%)
363.25 USD
0 (0%)
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 scores excellent points on both the profitability and health parts. This is a solid base for a good stock. RL is not valued too expensively and it also shows a decent growth rate. These ratings would make RL suitable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year RL was profitable.
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
With an excellent Return On Assets value of 11.63%, RL belongs to the best of the industry, outperforming 91.11% of the companies in the same industry.
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.
With an excellent Return On Invested Capital value of 16.88%, RL belongs to the best of the industry, outperforming 86.67% of the companies in the same industry.
RL had an Average Return On Invested Capital over the past 3 years of 13.65%. This is above the industry average of 11.59%.
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's Profit Margin of 11.28% is amongst the best of the industry. RL outperforms 91.11% of its industry peers.
RL's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 15.22%, RL belongs to the best of the industry, outperforming 86.67% of the companies in the same industry.
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so RL is still creating some value.
RL has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, RL has less shares outstanding
RL has a better debt/assets ratio than last year.
2.2 Solvency
RL has an Altman-Z score of 6.14. This indicates that RL is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of RL (6.14) is better than 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.
Looking at the Debt to FCF ratio, with a value of 2.22, RL is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
RL has a Debt/Equity ratio of 0.57. This is a neutral value indicating RL is somewhat dependend on debt financing.
RL has a Debt to Equity ratio of 0.57. This is in the lower half of the industry: RL underperforms 64.44% 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 | 6.14 |
ROIC/WACC1.51
WACC11.2%
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.
With a decent Quick ratio value of 1.35, RL is doing good in the industry, outperforming 68.89% of the companies in the same industry.
| 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.
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.
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 10.21% yearly.
The Revenue is expected to grow by 4.92% on average over the next years.
EPS Next Y28.71%
EPS Next 2Y18.51%
EPS Next 3Y16.36%
EPS Next 5Y10.21%
Revenue Next Year10.44%
Revenue Next 2Y7.7%
Revenue Next 3Y6.85%
Revenue Next 5Y4.92%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
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
The Price/Earnings ratio is 24.80, which indicates a rather expensive current valuation of RL.
The rest of the industry has a similar Price/Earnings ratio as RL.
When comparing the Price/Earnings ratio of RL to the average of the S&P500 Index (27.25), we can say RL is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 20.98, the valuation of RL can be described as rather expensive.
RL's Price/Forward Earnings ratio is in line with the industry average.
RL is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.8 | ||
| Fwd PE | 20.98 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RL indicates a slightly more expensive valuation: RL is more expensive than 60.00% of the companies listed in the same industry.
RL's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.99 | ||
| EV/EBITDA | 15.76 |
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.
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)1.82
EPS Next 2Y18.51%
EPS Next 3Y16.36%
5. Dividend
5.1 Amount
With a yearly dividend of 1.00%, RL is not a good candidate for dividend investing.
RL's Dividend Yield is comparable with the industry average which is at 1.46.
With a Dividend Yield of 1.00, RL pays less dividend than the S&P500 average, which is at 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1% |
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.
RL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP24.37%
EPS Next 2Y18.51%
EPS Next 3Y16.36%
363.25
-6.56 (-1.77%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners101.16%
Inst Owner Change0.25%
Ins Owners3.54%
Ins Owner Change-0.3%
Market Cap22.03B
Revenue(TTM)7.57B
Net Income(TTM)854.30M
Analysts82.22
Price Target381.64 (5.06%)
Short Float %4.59%
Short Ratio2.61
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1% |
Yearly Dividend3.22
Dividend Growth(5Y)3.54%
DP24.37%
Div Incr Years4
Div Non Decr Years4
Ex-DateN/A
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)2%
PT rev (3m)9.7%
EPS NQ rev (1m)0.1%
EPS NQ rev (3m)8.18%
EPS NY rev (1m)0.07%
EPS NY rev (3m)3.48%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)3.62%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)2.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.8 | ||
| Fwd PE | 20.98 | ||
| P/S | 2.91 | ||
| P/FCF | 32.99 | ||
| P/OCF | 20.21 | ||
| P/B | 8.53 | ||
| P/tB | 13.65 | ||
| EV/EBITDA | 15.76 |
EPS(TTM)14.65
EY4.03%
EPS(NY)17.32
Fwd EY4.77%
FCF(TTM)11.01
FCFY3.03%
OCF(TTM)17.97
OCFY4.95%
SpS124.84
BVpS42.58
TBVpS26.61
PEG (NY)0.86
PEG (5Y)1.82
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 | 6.14 |
F-Score8
WACC11.2%
ROIC/WACC1.51
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 5Y10.21%
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 5Y4.92%
EBIT growth 1Y32.83%
EBIT growth 3Y6.32%
EBIT growth 5Y19.59%
EBIT Next Year47.21%
EBIT Next 3Y19.71%
EBIT Next 5Y12.28%
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 of RALPH LAUREN CORP (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.
What are the PE and PB ratios of RALPH LAUREN CORP (RL) stock?
The Price/Earnings (PE) ratio for RALPH LAUREN CORP (RL) is 24.8 and the Price/Book (PB) ratio is 8.53.
What is the financial health of RALPH LAUREN CORP (RL) stock?
The financial health rating of RALPH LAUREN CORP (RL) is 7 / 10.