RALPH LAUREN CORP (RL) Stock Fundamental Analysis
NYSE:RL - New York Stock Exchange, Inc. - US7512121010 - Common Stock - Currency: USD
RL gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 50 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. RL has a decent growth rate and is not valued too expensively. These ratings could make RL a good candidate 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.
RL had positive earnings in 4 of the past 5 years.
In the past 5 years RL always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of RL (9.95%) is better than 79.59% of its industry peers.
RL's Return On Equity of 27.75% is amongst the best of the industry. RL outperforms 83.67% of its industry peers.
RL has a Return On Invested Capital of 15.55%. This is in the better half of the industry: RL outperforms 79.59% of its industry peers.
RL had an Average Return On Invested Capital over the past 3 years of 12.08%. This is in line with the industry average of 11.76%.
The last Return On Invested Capital (15.55%) for RL is above the 3 year average (12.08%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.95% | ||
| ROE | 27.75% | ||
| ROIC | 15.55% |
ROA(3y)8.42%
ROA(5y)5.8%
ROE(3y)23.85%
ROE(5y)16.23%
ROIC(3y)12.08%
ROIC(5y)8.89%
1.3 Margins
The Profit Margin of RL (10.14%) is better than 89.80% of its industry peers.
In the last couple of years the Profit Margin of RL has grown nicely.
Looking at the Operating Margin, with a value of 13.70%, RL belongs to the top 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.
With an excellent Gross Margin value of 68.08%, RL belongs to the best of the industry, outperforming 95.92% of the companies in the same industry.
RL's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.7% | ||
| PM (TTM) | 10.14% | ||
| GM | 68.08% |
OM growth 3Y40.1%
OM growth 5Y1.65%
PM growth 3YN/A
PM growth 5Y7.38%
GM growth 3Y0.54%
GM growth 5Y1.6%
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.
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
RL has an Altman-Z score of 5.53. This indicates that RL is financially healthy and has little risk of bankruptcy at the moment.
RL has a better Altman-Z score (5.53) than 87.76% of its industry peers.
The Debt to FCF ratio of RL is 1.32, which is an excellent value as it means it would take RL, only 1.32 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of RL (1.32) is better than 81.63% of its industry peers.
RL has a Debt/Equity ratio of 0.39. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.39, RL is in line with its industry, outperforming 48.98% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | 1.32 | ||
| Altman-Z | 5.53 |
ROIC/WACC1.58
WACC9.84%
2.3 Liquidity
RL has a Current Ratio of 1.76. This is a normal value and indicates that RL is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.76, RL is doing worse than 65.31% of the companies in the same industry.
RL has a Quick Ratio of 1.31. 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 (1.31) 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 | 1.76 | ||
| Quick Ratio | 1.31 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 23.76% over the past year.
Measured over the past 5 years, RL shows a small growth in Earnings Per Share. The EPS has been growing by 7.50% on average per year.
The Revenue has been growing slightly by 5.23% in the past year.
Measured over the past years, RL shows a small growth in Revenue. The Revenue has been growing by 0.99% on average per year.
EPS 1Y (TTM)23.76%
EPS 3Y83.51%
EPS 5Y7.5%
EPS Q2Q%15.59%
Revenue 1Y (TTM)5.23%
Revenue growth 3Y14.65%
Revenue growth 5Y0.99%
Sales Q2Q%10.83%
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 9.96% yearly.
RL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.69% yearly.
EPS Next Y20.77%
EPS Next 2Y17.16%
EPS Next 3Y15.98%
EPS Next 5Y9.96%
Revenue Next Year3.65%
Revenue Next 2Y3.86%
Revenue Next 3Y3.96%
Revenue Next 5Y3.69%
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 accelerating.
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
The Price/Earnings ratio is 24.20, which indicates a rather expensive current valuation of RL.
The rest of the industry has a similar Price/Earnings ratio as RL.
RL's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 30.30.
With a Price/Forward Earnings ratio of 20.11, 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.
The average S&P500 Price/Forward Earnings ratio is at 23.06. RL is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.2 | ||
| Fwd PE | 20.11 |
4.2 Price Multiples
RL's Enterprise Value to EBITDA ratio is in line with the industry average.
RL's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.63 | ||
| EV/EBITDA | 14.28 |
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.
A more expensive valuation may be justified as RL's earnings are expected to grow with 15.98% in the coming years.
PEG (NY)1.17
PEG (5Y)3.23
EPS Next 2Y17.16%
EPS Next 3Y15.98%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.18%, RL has a reasonable but not impressive dividend return.
RL's Dividend Yield is a higher than the industry average which is at 2.85.
Compared to an average S&P500 Dividend Yield of 2.29, RL's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.18% |
5.2 History
The dividend of RL has a limited annual growth rate of 4.76%.
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)4.76%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
28.10% 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.
DP28.1%
EPS Next 2Y17.16%
EPS Next 3Y15.98%
NYSE:RL (2/21/2025, 11:28:46 AM)
284.825
-1.68 (-0.58%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners109.02%
Inst Owner Change-3.76%
Ins Owners3.53%
Ins Owner Change-3.65%
Market Cap17.59B
Analysts77.78
Price Target248.01 (-12.93%)
Short Float %4.9%
Short Ratio2.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.18% |
Yearly Dividend3.02
Dividend Growth(5Y)4.76%
DP28.1%
Div Incr Years3
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.36%
Min EPS beat(2)2.48%
Max EPS beat(2)4.24%
EPS beat(4)3
Avg EPS beat(4)3.16%
Min EPS beat(4)-0.14%
Max EPS beat(4)6.05%
EPS beat(8)7
Avg EPS beat(8)10.16%
EPS beat(12)11
Avg EPS beat(12)11.07%
EPS beat(16)15
Avg EPS beat(16)30.92%
Revenue beat(2)1
Avg Revenue beat(2)1.62%
Min Revenue beat(2)-0.12%
Max Revenue beat(2)3.35%
Revenue beat(4)1
Avg Revenue beat(4)-0.19%
Min Revenue beat(4)-2.55%
Max Revenue beat(4)3.35%
Revenue beat(8)3
Avg Revenue beat(8)-0.21%
Revenue beat(12)6
Avg Revenue beat(12)0.13%
Revenue beat(16)9
Avg Revenue beat(16)1.36%
PT rev (1m)1.9%
PT rev (3m)24.53%
EPS NQ rev (1m)-2.21%
EPS NQ rev (3m)1.26%
EPS NY rev (1m)2.8%
EPS NY rev (3m)5.38%
Revenue NQ rev (1m)1.26%
Revenue NQ rev (3m)0.3%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.9%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.2 | ||
| Fwd PE | 20.11 | ||
| P/S | 2.53 | ||
| P/FCF | 16.63 | ||
| P/OCF | 14.26 | ||
| P/B | 6.93 | ||
| P/tB | 11.01 | ||
| EV/EBITDA | 14.28 |
EPS(TTM)11.77
EY4.13%
EPS(NY)14.17
Fwd EY4.97%
FCF(TTM)17.13
FCFY6.01%
OCF(TTM)19.98
OCFY7.01%
SpS112.53
BVpS41.11
TBVpS25.86
PEG (NY)1.17
PEG (5Y)3.23
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.95% | ||
| ROE | 27.75% | ||
| ROCE | 19.59% | ||
| ROIC | 15.55% | ||
| ROICexc | 27.81% | ||
| ROICexgc | 42.59% | ||
| OM | 13.7% | ||
| PM (TTM) | 10.14% | ||
| GM | 68.08% | ||
| FCFM | 15.22% |
ROA(3y)8.42%
ROA(5y)5.8%
ROE(3y)23.85%
ROE(5y)16.23%
ROIC(3y)12.08%
ROIC(5y)8.89%
ROICexc(3y)19.57%
ROICexc(5y)14.45%
ROICexgc(3y)28.29%
ROICexgc(5y)20.84%
ROCE(3y)15.23%
ROCE(5y)11.33%
ROICexcg growth 3Y62.44%
ROICexcg growth 5Y-4.41%
ROICexc growth 3Y63.35%
ROICexc growth 5Y-1.3%
OM growth 3Y40.1%
OM growth 5Y1.65%
PM growth 3YN/A
PM growth 5Y7.38%
GM growth 3Y0.54%
GM growth 5Y1.6%
F-Score8
Asset Turnover0.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | 1.32 | ||
| Debt/EBITDA | 0.84 | ||
| Cap/Depr | 79.87% | ||
| Cap/Sales | 2.54% | ||
| Interest Coverage | 20.34 | ||
| Cash Conversion | 105.22% | ||
| Profit Quality | 150.11% | ||
| Current Ratio | 1.76 | ||
| Quick Ratio | 1.31 | ||
| Altman-Z | 5.53 |
F-Score8
WACC9.84%
ROIC/WACC1.58
Cap/Depr(3y)81.09%
Cap/Depr(5y)77.42%
Cap/Sales(3y)2.85%
Cap/Sales(5y)3.08%
Profit Quality(3y)89.51%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)23.76%
EPS 3Y83.51%
EPS 5Y7.5%
EPS Q2Q%15.59%
EPS Next Y20.77%
EPS Next 2Y17.16%
EPS Next 3Y15.98%
EPS Next 5Y9.96%
Revenue 1Y (TTM)5.23%
Revenue growth 3Y14.65%
Revenue growth 5Y0.99%
Sales Q2Q%10.83%
Revenue Next Year3.65%
Revenue Next 2Y3.86%
Revenue Next 3Y3.96%
Revenue Next 5Y3.69%
EBIT growth 1Y23.97%
EBIT growth 3Y60.62%
EBIT growth 5Y2.65%
EBIT Next Year42.24%
EBIT Next 3Y19.52%
EBIT Next 5Y12.46%
FCF growth 1Y1189.88%
FCF growth 3Y49.08%
FCF growth 5Y9.08%
OCF growth 1Y323.73%
OCF growth 3Y41.09%
OCF growth 5Y6.42%