RALPH LAUREN CORP (RL) Stock Fundamental Analysis
USA - NYSE:RL - US7512121010 - Common Stock
312.45 USD
-1.53 (-0.49%)
312 USD
-0.45 (-0.14%)
RL gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 49 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 is not valued too expensively and it also shows a decent growth rate. This makes RL very considerable 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.
RL had positive earnings in 4 of the past 5 years.
RL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.25%, RL belongs to the top of the industry, outperforming 89.80% of the companies in the same industry.
Looking at the Return On Equity, with a value of 31.59%, RL belongs to the top of the industry, outperforming 87.76% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 15.74%, RL belongs to the top of the industry, outperforming 83.67% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for RL is in line with the industry average of 12.08%.
The 3 year average ROIC (13.65%) for RL is below the current ROIC(15.74%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.25% | ||
| ROE | 31.59% | ||
| ROIC | 15.74% |
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
With an excellent Profit Margin value of 10.91%, RL belongs to the best of the industry, outperforming 91.84% of the companies in the same industry.
In the last couple of years the Profit Margin of RL has grown nicely.
The Operating Margin of RL (14.64%) is better than 87.76% of its industry peers.
In the last couple of years the Operating Margin of RL has grown nicely.
The Gross Margin of RL (69.03%) is better than 95.92% of its industry peers.
In the last couple of years the Gross Margin of RL has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.64% | ||
| PM (TTM) | 10.91% | ||
| GM | 69.03% |
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.
RL has less shares outstanding than it did 1 year ago.
RL has less shares outstanding than it did 5 years ago.
The debt/assets ratio for RL has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.27 indicates that RL is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 5.27, RL belongs to the best of the industry, outperforming 87.76% of the companies in the same industry.
The Debt to FCF ratio of RL is 2.47, which is a good value as it means it would take RL, 2.47 years of fcf income to pay off all of its debts.
RL's Debt to FCF ratio of 2.47 is fine compared to the rest of the industry. RL outperforms 77.55% of its industry peers.
RL has a Debt/Equity ratio of 0.58. This is a neutral value indicating RL is somewhat dependend on debt financing.
The Debt to Equity ratio of RL (0.58) is comparable to the rest of the industry.
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 | 0.58 | ||
| Debt/FCF | 2.47 | ||
| Altman-Z | 5.27 |
ROIC/WACC1.54
WACC10.19%
2.3 Liquidity
A Current Ratio of 1.84 indicates that RL should not have too much problems paying its short term obligations.
The Current ratio of RL (1.84) is comparable to the rest of the industry.
RL has a Quick Ratio of 1.30. 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 better Quick ratio (1.30) than 67.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.84 | ||
| Quick Ratio | 1.3 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 25.47% over the past year.
The Earnings Per Share has been growing by 13.66% on average over the past years. This is quite good.
RL shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.61%.
The Revenue has been growing slightly by 2.82% on average over the past years.
EPS 1Y (TTM)25.47%
EPS 3Y13.92%
EPS 5Y13.66%
EPS Q2Q%39.63%
Revenue 1Y (TTM)9.61%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%13.68%
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 10.92% yearly.
Based on estimates for the next years, RL will show a small growth in Revenue. The Revenue will grow by 5.06% on average per year.
EPS Next Y24.3%
EPS Next 2Y16.36%
EPS Next 3Y14.21%
EPS Next 5Y10.92%
Revenue Next Year7.85%
Revenue Next 2Y6.31%
Revenue Next 3Y5.88%
Revenue Next 5Y5.06%
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.
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 23.32.
Compared to the rest of the industry, the Price/Earnings ratio of RL is on the same level as its industry peers.
When comparing the Price/Earnings ratio of RL to the average of the S&P500 Index (27.38), we can say RL is valued inline with the index average.
A Price/Forward Earnings ratio of 18.71 indicates a rather expensive valuation of RL.
RL's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.86, RL is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.32 | ||
| Fwd PE | 18.71 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RL indicates a slightly more expensive valuation: RL is more expensive than 61.22% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, RL is valued a bit cheaper than the industry average as 63.27% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.78 | ||
| EV/EBITDA | 14.32 |
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.
A more expensive valuation may be justified as RL's earnings are expected to grow with 14.21% in the coming years.
PEG (NY)0.96
PEG (5Y)1.71
EPS Next 2Y16.36%
EPS Next 3Y14.21%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.15%, RL has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.08, RL pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.15, RL pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
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
25.71% of the earnings are spent on dividend by RL. This is a low number and sustainable payout ratio.
The dividend of RL is growing, but earnings are growing more, so the dividend growth is sustainable.
DP25.71%
EPS Next 2Y16.36%
EPS Next 3Y14.21%
312.45
-1.53 (-0.49%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners107.01%
Inst Owner Change-3.37%
Ins Owners3.58%
Ins Owner Change7.2%
Market Cap18.93B
Analysts82.31
Price Target343.23 (9.85%)
Short Float %4.2%
Short Ratio2.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
Yearly Dividend3.22
Dividend Growth(5Y)3.54%
DP25.71%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.28%
Min EPS beat(2)4.63%
Max EPS beat(2)9.93%
EPS beat(4)4
Avg EPS beat(4)5.32%
Min EPS beat(4)2.48%
Max EPS beat(4)9.93%
EPS beat(8)7
Avg EPS beat(8)5.9%
EPS beat(12)11
Avg EPS beat(12)9.25%
EPS beat(16)15
Avg EPS beat(16)12.88%
Revenue beat(2)2
Avg Revenue beat(2)0.45%
Min Revenue beat(2)0.14%
Max Revenue beat(2)0.77%
Revenue beat(4)3
Avg Revenue beat(4)1.03%
Min Revenue beat(4)-0.12%
Max Revenue beat(4)3.35%
Revenue beat(8)4
Avg Revenue beat(8)-0.07%
Revenue beat(12)6
Avg Revenue beat(12)-0.13%
Revenue beat(16)9
Avg Revenue beat(16)0.57%
PT rev (1m)1.24%
PT rev (3m)6.94%
EPS NQ rev (1m)0%
EPS NQ rev (3m)22.81%
EPS NY rev (1m)7.9%
EPS NY rev (3m)10.06%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)6.25%
Revenue NY rev (1m)2.35%
Revenue NY rev (3m)2.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.32 | ||
| Fwd PE | 18.71 | ||
| P/S | 2.6 | ||
| P/FCF | 24.78 | ||
| P/OCF | 16.69 | ||
| P/B | 7.52 | ||
| P/tB | 12.28 | ||
| EV/EBITDA | 14.32 |
EPS(TTM)13.4
EY4.29%
EPS(NY)16.7
Fwd EY5.34%
FCF(TTM)12.61
FCFY4.04%
OCF(TTM)18.72
OCFY5.99%
SpS120.29
BVpS41.53
TBVpS25.45
PEG (NY)0.96
PEG (5Y)1.71
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.25% | ||
| ROE | 31.59% | ||
| ROCE | 19.52% | ||
| ROIC | 15.74% | ||
| ROICexc | 26.98% | ||
| ROICexgc | 38.84% | ||
| OM | 14.64% | ||
| PM (TTM) | 10.91% | ||
| GM | 69.03% | ||
| FCFM | 10.48% |
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-Score6
Asset Turnover0.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 2.47 | ||
| Debt/EBITDA | 1.14 | ||
| Cap/Depr | 167.69% | ||
| Cap/Sales | 5.08% | ||
| Interest Coverage | 28 | ||
| Cash Conversion | 88.06% | ||
| Profit Quality | 96.11% | ||
| Current Ratio | 1.84 | ||
| Quick Ratio | 1.3 | ||
| Altman-Z | 5.27 |
F-Score6
WACC10.19%
ROIC/WACC1.54
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)25.47%
EPS 3Y13.92%
EPS 5Y13.66%
EPS Q2Q%39.63%
EPS Next Y24.3%
EPS Next 2Y16.36%
EPS Next 3Y14.21%
EPS Next 5Y10.92%
Revenue 1Y (TTM)9.61%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%13.68%
Revenue Next Year7.85%
Revenue Next 2Y6.31%
Revenue Next 3Y5.88%
Revenue Next 5Y5.06%
EBIT growth 1Y26.7%
EBIT growth 3Y6.32%
EBIT growth 5Y19.59%
EBIT Next Year35.63%
EBIT Next 3Y17.15%
EBIT Next 5Y12.35%
FCF growth 1Y82.42%
FCF growth 3Y22.89%
FCF growth 5Y16.04%
OCF growth 1Y78.17%
OCF growth 3Y19.94%
OCF growth 5Y10.36%