RALPH LAUREN CORP (RL)
US7512121010 - Common Stock
RL gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 51 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
RL's Return On Assets of 10.28% is amongst the best of the industry. RL outperforms 82.00% of its industry peers.
Looking at the Return On Equity, with a value of 28.85%, RL belongs to the top of the industry, outperforming 86.00% of the companies in the same industry.
RL has a Return On Invested Capital of 13.18%. This is in the better half of the industry: RL outperforms 76.00% 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 12.00%.
The 3 year average ROIC (12.08%) for RL is below the current ROIC(13.18%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.28% | ||
| ROE | 28.85% | ||
| ROIC | 13.18% |
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 better Profit Margin (10.27%) than 86.00% of its industry peers.
RL's Profit Margin has improved in the last couple of years.
RL has a better Operating Margin (12.67%) than 84.00% of its industry peers.
RL's Operating Margin has improved in the last couple of years.
RL's Gross Margin of 67.14% is amongst the best of the industry. RL outperforms 94.00% of its industry peers.
RL's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.67% | ||
| PM (TTM) | 10.27% | ||
| GM | 67.14% |
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.
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 4.85 indicates that RL is not in any danger for bankruptcy at the moment.
RL has a better Altman-Z score (4.85) than 80.00% of its industry peers.
The Debt to FCF ratio of RL is 1.54, which is an excellent value as it means it would take RL, only 1.54 years of fcf income to pay off all of its debts.
RL's Debt to FCF ratio of 1.54 is fine compared to the rest of the industry. RL outperforms 70.00% of its industry peers.
A Debt/Equity ratio of 0.59 indicates that RL is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.59, RL is doing worse than 66.00% of the companies in the same industry.
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 | 0.59 | ||
| Debt/FCF | 1.54 | ||
| Altman-Z | 4.85 |
ROIC/WACC1.74
WACC7.59%
2.3 Liquidity
A Current Ratio of 2.19 indicates that RL has no problem at all paying its short term obligations.
RL has a Current ratio (2.19) which is in line with its industry peers.
RL has a Quick Ratio of 1.53. 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 1.53 is fine compared to the rest of the industry. RL outperforms 68.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.19 | ||
| Quick Ratio | 1.53 |
3. Growth
3.1 Past
RL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.09%, which is quite impressive.
The Earnings Per Share has been growing slightly by 7.50% on average over the past years.
Looking at the last year, RL shows a small growth in Revenue. The Revenue has grown by 3.06% in the last year.
The Revenue has been growing slightly by 0.99% on average over the past years.
EPS 1Y (TTM)21.09%
EPS 3Y83.51%
EPS 5Y7.5%
EPS Q2Q%15.38%
Revenue 1Y (TTM)3.06%
Revenue growth 3Y14.65%
Revenue growth 5Y0.99%
Sales Q2Q%1.05%
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 9.88% on average per year.
Based on estimates for the next years, RL will show a small growth in Revenue. The Revenue will grow by 3.34% on average per year.
EPS Next Y12.89%
EPS Next 2Y12.22%
EPS Next 3Y12.29%
EPS Next 5Y9.88%
Revenue Next Year2.01%
Revenue Next 2Y3.11%
Revenue Next 3Y3.48%
Revenue Next 5Y3.34%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last 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
With a Price/Earnings ratio of 17.25, RL is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of RL indicates a somewhat cheap valuation: RL is cheaper than 64.00% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 30.57, RL is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 14.17, the valuation of RL can be described as correct.
Based on the Price/Forward Earnings ratio, RL is valued a bit cheaper than the industry average as 64.00% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of RL to the average of the S&P500 Index (22.04), we can say RL is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.25 | ||
| Fwd PE | 14.17 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RL indicates a somewhat cheap valuation: RL is cheaper than 64.00% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as RL.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.43 | ||
| EV/EBITDA | 10.04 |
4.3 Compensation for Growth
RL's 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.
RL's earnings are expected to grow with 12.29% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.34
PEG (5Y)2.3
EPS Next 2Y12.22%
EPS Next 3Y12.29%
5. Dividend
5.1 Amount
RL has a Yearly Dividend Yield of 1.88%.
RL's Dividend Yield is a higher than the industry average which is at 2.97.
Compared to an average S&P500 Dividend Yield of 2.26, RL has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.88% |
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 28.25% 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.
DP28.25%
EPS Next 2Y12.22%
EPS Next 3Y12.29%
RALPH LAUREN CORP
NYSE:RL (9/17/2024, 6:40:00 PM)
After market: 184.21 0 (0%)184.21
+2.77 (+1.53%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap11.41B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.88% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.25 | ||
| Fwd PE | 14.17 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.34
PEG (5Y)2.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.28% | ||
| ROE | 28.85% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 12.67% | ||
| PM (TTM) | 10.27% | ||
| GM | 67.14% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.19 | ||
| Quick Ratio | 1.53 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)21.09%
EPS 3Y83.51%
EPS 5Y
EPS Q2Q%
EPS Next Y12.89%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.06%
Revenue growth 3Y14.65%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y