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 48 industry peers in the Textiles, Apparel & Luxury Goods industry. RL scores excellent points on both the profitability and health parts. This is a solid base for a good stock. RL has a correct valuation and a medium growth rate. These ratings would make RL suitable 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.
RL had positive earnings in 4 of the past 5 years.
In the past 5 years RL always reported a positive cash flow from operatings.
1.2 Ratios
RL has a Return On Assets of 10.54%. This is amongst the best in the industry. RL outperforms 83.33% of its industry peers.
RL's Return On Equity of 28.70% is amongst the best of the industry. RL outperforms 83.33% of its industry peers.
RL's Return On Invested Capital of 16.25% is fine compared to the rest of the industry. RL outperforms 79.17% of its industry peers.
The Average Return On Invested Capital over the past 3 years for RL 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
With an excellent Profit Margin value of 10.49%, RL belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
In the last couple of years the Profit Margin of RL has grown nicely.
With an excellent Operating Margin value of 13.98%, 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.
RL has a Gross Margin of 68.55%. This is amongst the best in the industry. RL outperforms 93.75% of its industry peers.
RL's Gross Margin has improved in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), RL is creating value.
Compared to 1 year ago, RL has less shares outstanding
RL has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, RL has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.47 indicates that RL is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 5.47, RL belongs to the best of the industry, outperforming 89.58% of the companies in the same industry.
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.
Looking at the Debt to FCF ratio, with a value of 1.37, RL belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
RL has a Debt/Equity ratio of 0.38. This is a healthy value indicating a solid balance between debt and equity.
RL has a Debt to Equity ratio of 0.38. This is comparable to the rest of the industry: RL outperforms 52.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 1.37 | ||
| Altman-Z | 5.47 |
ROIC/WACC1.93
WACC8.42%
2.3 Liquidity
A Current Ratio of 1.78 indicates that RL should not have too much problems paying its short term obligations.
RL has a Current ratio of 1.78. This is in the lower half of the industry: RL underperforms 62.50% 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.
The Quick ratio of RL (1.33) is comparable to the rest of the industry.
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 | 1.78 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
RL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.48%, which is quite good.
RL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.66% yearly.
RL shows a small growth in Revenue. In the last year, the Revenue has grown by 6.75%.
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
RL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.64% yearly.
RL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.56% yearly.
EPS Next Y15.26%
EPS Next 2Y12.77%
EPS Next 3Y12.28%
EPS Next 5Y9.64%
Revenue Next Year5.25%
Revenue Next 2Y4.95%
Revenue Next 3Y5.11%
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
The Price/Earnings ratio is 22.26, which indicates a rather expensive current valuation of RL.
RL's Price/Earnings is on the same level as the industry average.
RL's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.28.
The Price/Forward Earnings ratio is 19.32, which indicates a rather expensive current valuation of RL.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RL is on the same level as its industry peers.
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 | 22.26 | ||
| Fwd PE | 19.32 |
4.2 Price Multiples
RL's Enterprise Value to EBITDA is on the same level as the industry average.
64.58% of the companies in the same industry are more expensive than RL, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.25 | ||
| EV/EBITDA | 12.87 |
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.
RL's earnings are expected to grow with 12.28% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.46
PEG (5Y)1.63
EPS Next 2Y12.77%
EPS Next 3Y12.28%
5. Dividend
5.1 Amount
RL has a Yearly Dividend Yield of 1.33%.
RL's Dividend Yield is a higher than the industry average which is at 3.85.
With a Dividend Yield of 1.33, RL pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.33% |
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
27.07% of the earnings are spent on dividend by RL. This is a low number and sustainable payout ratio.
RL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP27.07%
EPS Next 2Y12.77%
EPS Next 3Y12.28%
274.52
+2.42 (+0.89%)
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-1.13%
Ins Owners2.34%
Ins Owner Change7.08%
Market Cap16.56B
Analysts80
Price Target320.97 (16.92%)
Short Float %4.63%
Short Ratio2.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.33% |
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)15.88%
PT rev (3m)6.98%
EPS NQ rev (1m)9.27%
EPS NQ rev (3m)13.55%
EPS NY rev (1m)2.05%
EPS NY rev (3m)0.35%
Revenue NQ rev (1m)2.42%
Revenue NQ rev (3m)4.31%
Revenue NY rev (1m)1.11%
Revenue NY rev (3m)1.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.26 | ||
| Fwd PE | 19.32 | ||
| P/S | 2.34 | ||
| P/FCF | 16.25 | ||
| P/OCF | 13.41 | ||
| P/B | 6.4 | ||
| P/tB | 10.11 | ||
| EV/EBITDA | 12.87 |
EPS(TTM)12.33
EY4.49%
EPS(NY)14.21
Fwd EY5.18%
FCF(TTM)16.89
FCFY6.15%
OCF(TTM)20.48
OCFY7.46%
SpS117.36
BVpS42.91
TBVpS27.14
PEG (NY)1.46
PEG (5Y)1.63
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 | 5.47 |
F-Score8
WACC8.42%
ROIC/WACC1.93
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 Y15.26%
EPS Next 2Y12.77%
EPS Next 3Y12.28%
EPS Next 5Y9.64%
Revenue 1Y (TTM)6.75%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%8.25%
Revenue Next Year5.25%
Revenue Next 2Y4.95%
Revenue Next 3Y5.11%
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%