RALPH LAUREN CORP (RL) Stock Fundamental Analysis
NYSE:RL - New York Stock Exchange, Inc. - US7512121010 - Common Stock - Currency: USD
Overall RL gets a fundamental rating of 7 out of 10. We evaluated RL against 50 industry peers in the Textiles, Apparel & Luxury Goods industry. RL gets an excellent profitability rating and is at the same time showing great financial health properties. RL is valied quite expensively at the moment, while it does show a decent growth rate. This makes RL very considerable 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.
RL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
RL's Return On Assets of 10.54% is amongst the best of the industry. RL outperforms 84.00% of its industry peers.
With an excellent Return On Equity value of 28.70%, RL belongs to the best of the industry, outperforming 84.00% of the companies in the same industry.
RL has a Return On Invested Capital of 16.25%. This is in the better half of the industry: RL outperforms 80.00% of its industry peers.
RL had an Average Return On Invested Capital over the past 3 years of 13.65%. This is above the industry average of 11.45%.
The 3 year average ROIC (13.65%) for RL is below the current ROIC(16.25%), indicating increased profibility in the last year.
| 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
Looking at the Profit Margin, with a value of 10.49%, RL belongs to the top of the industry, outperforming 88.00% of the companies in the same industry.
RL's Profit Margin has improved in the last couple of years.
RL's Operating Margin of 13.98% is amongst the best of the industry. RL outperforms 84.00% 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 94.00% 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.
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
An Altman-Z score of 5.60 indicates that RL is not in any danger for bankruptcy at the moment.
RL has a Altman-Z score of 5.60. This is amongst the best in the industry. RL outperforms 90.00% 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.
RL has a better Debt to FCF ratio (1.37) than 82.00% of its industry peers.
RL has a Debt/Equity ratio of 0.38. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.38, RL perfoms like the industry average, outperforming 56.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 1.37 | ||
| Altman-Z | 5.6 |
ROIC/WACC1.84
WACC8.84%
2.3 Liquidity
RL has a Current Ratio of 1.78. This is a normal value and indicates that RL is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of RL (1.78) is worse than 60.00% 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
Based on estimates for the next years, RL will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.64% on average per year.
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 Y15.2%
EPS Next 2Y12.76%
EPS Next 3Y12.18%
EPS Next 5Y9.64%
Revenue Next Year5.24%
Revenue Next 2Y4.95%
Revenue Next 3Y5.02%
Revenue Next 5Y4.56%
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 decreasing.
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
RL is valuated rather expensively with a Price/Earnings ratio of 23.28.
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 (27.30), we can say RL is valued inline with the index average.
RL is valuated rather expensively with a Price/Forward Earnings ratio of 20.20.
RL's Price/Forward Earnings is on the same level as the industry average.
RL's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.28 | ||
| Fwd PE | 20.2 |
4.2 Price Multiples
RL's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RL is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.06 | ||
| EV/EBITDA | 13.67 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct 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 12.18% in the coming years.
PEG (NY)1.53
PEG (5Y)1.7
EPS Next 2Y12.76%
EPS Next 3Y12.18%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.26%, RL has a reasonable but not impressive dividend return.
RL's Dividend Yield is a higher than the industry average which is at 3.54.
With a Dividend Yield of 1.26, RL pays less dividend than the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.26% |
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.
The dividend of RL is growing, but earnings are growing more, so the dividend growth is sustainable.
DP27.07%
EPS Next 2Y12.76%
EPS Next 3Y12.18%
286.99
-2.88 (-0.99%)
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 Change6.95%
Market Cap17.38B
Analysts80
Price Target320.97 (11.84%)
Short Float %4.63%
Short Ratio2.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.26% |
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)0%
PT rev (3m)6.83%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)13.27%
EPS NY rev (1m)2%
EPS NY rev (3m)0.17%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.05%
Revenue NY rev (1m)-0.08%
Revenue NY rev (3m)1.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.28 | ||
| Fwd PE | 20.2 | ||
| P/S | 2.46 | ||
| P/FCF | 17.06 | ||
| P/OCF | 14.07 | ||
| P/B | 6.72 | ||
| P/tB | 10.62 | ||
| EV/EBITDA | 13.67 |
EPS(TTM)12.33
EY4.3%
EPS(NY)14.2
Fwd EY4.95%
FCF(TTM)16.82
FCFY5.86%
OCF(TTM)20.39
OCFY7.11%
SpS116.87
BVpS42.74
TBVpS27.03
PEG (NY)1.53
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 | 5.6 |
F-Score8
WACC8.84%
ROIC/WACC1.84
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 Y15.2%
EPS Next 2Y12.76%
EPS Next 3Y12.18%
EPS Next 5Y9.64%
Revenue 1Y (TTM)6.75%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%8.25%
Revenue Next Year5.24%
Revenue Next 2Y4.95%
Revenue Next 3Y5.02%
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%