RALPH LAUREN CORP (RL) Stock Fundamental Analysis
NYSE:RL - New York Stock Exchange, Inc. - US7512121010 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to RL. RL was compared to 48 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 is valied quite expensively at the moment, while it does show a decent growth rate. These ratings would make RL suitable for quality investing!
1. Profitability
1.1 Basic Checks
RL had positive earnings in the past year.
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
With a decent Return On Assets value of 9.95%, RL is doing good in the industry, outperforming 77.08% of the companies in the same industry.
The Return On Equity of RL (27.75%) is better than 81.25% of its industry peers.
RL has a better Return On Invested Capital (15.55%) than 77.08% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for RL is in line with the industry average of 13.46%.
The 3 year average ROIC (12.08%) for RL is below the current ROIC(15.55%), indicating increased profibility in the last year.
| 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
RL has a Profit Margin of 10.14%. This is amongst the best in the industry. RL outperforms 83.33% of its industry peers.
RL's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 13.70%, RL belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
In the last couple of years the Operating Margin of RL has grown nicely.
Looking at the Gross Margin, with a value of 68.08%, RL belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
In the last couple of years the Gross Margin of RL has grown nicely.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), RL is creating some value.
Compared to 1 year ago, RL has less shares outstanding
The number of shares outstanding for RL has been reduced compared to 5 years ago.
RL has a better debt/assets ratio than last year.
2.2 Solvency
RL has an Altman-Z score of 5.46. This indicates that RL is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.46, RL belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
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.
RL has a Debt to FCF ratio of 1.32. This is amongst the best in the industry. RL outperforms 83.33% of its industry peers.
A Debt/Equity ratio of 0.39 indicates that RL is not too dependend on debt financing.
RL has a Debt to Equity ratio of 0.39. This is comparable to the rest of the industry: RL outperforms 52.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | 1.32 | ||
| Altman-Z | 5.46 |
ROIC/WACC1.55
WACC10%
2.3 Liquidity
A Current Ratio of 1.76 indicates that RL should not have too much problems paying its short term obligations.
The Current ratio of RL (1.76) is comparable to the rest of the 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's Quick ratio of 1.31 is in line compared to the rest of the industry. RL outperforms 58.33% of its industry peers.
RL does not score too well on the current and quick ratio evaluation. However, as it has 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
RL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.76%, which is quite impressive.
RL shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.50% yearly.
RL shows a small growth in Revenue. In the last year, the Revenue has grown by 5.23%.
The Revenue has been growing slightly by 0.99% on average over the past years.
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
The Earnings Per Share is expected to grow by 12.13% on average over the next years. This is quite good.
The Revenue is expected to grow by 4.76% on average over the next years.
EPS Next Y20.55%
EPS Next 2Y16.16%
EPS Next 3Y14.47%
EPS Next 5Y12.13%
Revenue Next Year6.02%
Revenue Next 2Y5.07%
Revenue Next 3Y4.84%
Revenue Next 5Y4.76%
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 23.81, which indicates a rather expensive current valuation of RL.
Compared to the rest of the industry, the Price/Earnings ratio of RL indicates a slightly more expensive valuation: RL is more expensive than 60.42% of the companies listed in the same industry.
RL is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.60, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 20.12, 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 is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.43, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.81 | ||
| Fwd PE | 20.12 |
4.2 Price Multiples
60.42% of the companies in the same industry are cheaper than RL, based on the Enterprise Value to EBITDA ratio.
RL's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.36 | ||
| EV/EBITDA | 13.82 |
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 14.47% in the coming years.
PEG (NY)1.16
PEG (5Y)3.18
EPS Next 2Y16.16%
EPS Next 3Y14.47%
5. Dividend
5.1 Amount
RL has a Yearly Dividend Yield of 1.23%.
Compared to an average industry Dividend Yield of 3.56, RL pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.23, RL pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.23% |
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
RL pays out 28.10% 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.
DP28.1%
EPS Next 2Y16.16%
EPS Next 3Y14.47%
280.2
+2.53 (+0.91%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners104.84%
Inst Owner Change-0.75%
Ins Owners1.92%
Ins Owner Change-4.65%
Market Cap17.31B
Analysts79.26
Price Target276.98 (-1.15%)
Short Float %7.02%
Short Ratio2.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.23% |
Yearly Dividend3.02
Dividend Growth(5Y)4.76%
DP28.1%
Div Incr Years3
Div Non Decr Years3
Ex-Date
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)-7.81%
PT rev (3m)11.68%
EPS NQ rev (1m)0.47%
EPS NQ rev (3m)0.88%
EPS NY rev (1m)-0.17%
EPS NY rev (3m)-0.18%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.24%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.81 | ||
| Fwd PE | 20.12 | ||
| P/S | 2.49 | ||
| P/FCF | 16.36 | ||
| P/OCF | 14.02 | ||
| P/B | 6.82 | ||
| P/tB | 10.84 | ||
| EV/EBITDA | 13.82 |
EPS(TTM)11.77
EY4.2%
EPS(NY)13.93
Fwd EY4.97%
FCF(TTM)17.13
FCFY6.11%
OCF(TTM)19.98
OCFY7.13%
SpS112.53
BVpS41.11
TBVpS25.86
PEG (NY)1.16
PEG (5Y)3.18
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 | 5.46 |
F-Score8
WACC10%
ROIC/WACC1.55
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 Y20.55%
EPS Next 2Y16.16%
EPS Next 3Y14.47%
EPS Next 5Y12.13%
Revenue 1Y (TTM)5.23%
Revenue growth 3Y14.65%
Revenue growth 5Y0.99%
Sales Q2Q%10.83%
Revenue Next Year6.02%
Revenue Next 2Y5.07%
Revenue Next 3Y4.84%
Revenue Next 5Y4.76%
EBIT growth 1Y23.97%
EBIT growth 3Y60.62%
EBIT growth 5Y2.65%
EBIT Next Year47.23%
EBIT Next 3Y19.82%
EBIT Next 5Y14.4%
FCF growth 1Y1189.88%
FCF growth 3Y49.08%
FCF growth 5Y9.08%
OCF growth 1Y323.73%
OCF growth 3Y41.09%
OCF growth 5Y6.42%