RALPH LAUREN CORP (RL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RL - US7512121010 - Common Stock
360.32 USD
-7.05 (-1.92%)
360.32 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to RL. RL was compared to 45 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 has a decent growth rate and is not valued too expensively. These ratings would make RL suitable 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.
- 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 91.11% 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.
- Looking at the Return On Invested Capital, with a value of 16.88%, RL belongs to the top 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
- Looking at the Profit Margin, with a value of 11.28%, RL belongs to the top of the industry, outperforming 91.11% of the companies in the same industry.
- In the last couple of years the Profit Margin of RL has grown nicely.
- RL has a better Operating Margin (15.22%) than 86.67% of its industry peers.
- RL's Operating Margin has improved in the last couple of years.
- With an excellent Gross Margin value of 69.22%, RL belongs to the best of the industry, outperforming 95.56% of the companies in the same industry.
- RL's Gross Margin has improved in the last couple of years.
| 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
- RL has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is 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
- The debt/assets ratio for RL has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 6.17 indicates that RL is not in any danger for bankruptcy at the moment.
- With an excellent Altman-Z score value of 6.17, RL belongs to the best of the industry, outperforming 91.11% of the companies in the same industry.
- The Debt to FCF ratio of RL is 2.22, which is a good value as it means it would take RL, 2.22 years of fcf income to pay off all of its debts.
- RL has a Debt to FCF ratio of 2.22. This is in the better half of the industry: RL outperforms 77.78% of its industry peers.
- A Debt/Equity ratio of 0.57 indicates that RL is somewhat dependend on debt financing.
- The Debt to Equity ratio of RL (0.57) is worse than 64.44% of its industry peers.
- Even though the debt/equity ratio score it not favorable for RL, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 2.22 | ||
| Altman-Z | 6.17 |
ROIC/WACC1.5
WACC11.27%
2.3 Liquidity
- A Current Ratio of 2.04 indicates that RL has no problem at all paying its short term obligations.
- With a Current ratio value of 2.04, RL perfoms like the industry average, outperforming 55.56% 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.
- Looking at the Quick ratio, with a value of 1.35, RL is in the better half of 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
- RL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 31.74%, which is quite impressive.
- RL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.66% yearly.
- The Revenue has grown by 12.32% in the past year. This is quite good.
- RL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.82% yearly.
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
- The Earnings Per Share is expected to grow by 10.21% 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 4.92% on average per year.
EPS Next Y29.26%
EPS Next 2Y19.15%
EPS Next 3Y16.58%
EPS Next 5Y10.21%
Revenue Next Year10.6%
Revenue Next 2Y7.81%
Revenue Next 3Y6.89%
Revenue Next 5Y4.92%
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
- A Price/Earnings ratio of 24.60 indicates a rather expensive valuation of RL.
- 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 27.25, which is the current average of the S&P500 Index.
- RL is valuated rather expensively with a Price/Forward Earnings ratio of 20.58.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of RL is on the same level as its industry peers.
- RL is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.6 | ||
| Fwd PE | 20.58 |
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 | 32.72 | ||
| EV/EBITDA | 15.94 |
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.
- RL's earnings are expected to grow with 16.58% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.84
PEG (5Y)1.8
EPS Next 2Y19.15%
EPS Next 3Y16.58%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.00%, RL has a reasonable but not impressive dividend return.
- RL's Dividend Yield is comparable with the industry average which is at 1.45.
- With a Dividend Yield of 1.00, RL pays less dividend than the S&P500 average, which is at 1.82.
| 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 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 24.37% of its income as dividend. This is a sustainable payout ratio.
- The dividend of RL is growing, but earnings are growing more, so the dividend growth is sustainable.
DP24.37%
EPS Next 2Y19.15%
EPS Next 3Y16.58%
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 24.6 and the Price/Book (PB) ratio is 8.46.
What is the financial health of RALPH LAUREN CORP (RL) stock?
The financial health rating of RALPH LAUREN CORP (RL) is 7 / 10.