RALPH LAUREN CORP (RL) Stock Fundamental Analysis
NYSE:RL - US7512121010 - Common Stock
285.8 USD
+0.34 (+0.12%)
285.8 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to RL. RL was compared to 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 has a correct valuation and a medium growth rate. These ratings could make RL a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
RL had positive earnings in the past year.
RL had a positive operating cash flow in the past year.
Of the past 5 years RL 4 years were profitable.
In the past 5 years RL always reported a positive cash flow from operatings.
1.2 Ratios
RL's Return On Assets of 10.54% is amongst the best of the industry. RL outperforms 90.00% of its industry peers.
Looking at the Return On Equity, with a value of 28.70%, RL belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 16.25%, RL belongs to the top of the industry, outperforming 84.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for RL is above the industry average of 11.02%.
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
The Profit Margin of RL (10.49%) is better than 92.00% of its industry peers.
RL's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 13.98%, RL belongs to the top of the industry, outperforming 84.00% 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 94.00% 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so RL 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 5.58 indicates that RL is not in any danger for bankruptcy at the moment.
RL's Altman-Z score of 5.58 is amongst the best of the industry. RL outperforms 92.00% of its industry peers.
The Debt to FCF ratio of RL is 1.37, which is an excellent value as it means it would take RL, only 1.37 years of fcf income to pay off all of its debts.
RL has a Debt to FCF ratio of 1.37. This is amongst the best in the industry. RL outperforms 84.00% 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.
RL's Debt to Equity ratio of 0.38 is in line compared to the rest of the industry. RL outperforms 56.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 1.37 | ||
| Altman-Z | 5.58 |
ROIC/WACC1.81
WACC8.97%
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 worse Current ratio (1.78) than 62.00% 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.
The Quick ratio of RL (1.33) is better than 64.00% of its industry peers.
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 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 a small growth in Revenue. In the last year, the Revenue has grown by 6.75%.
Measured over the past years, RL shows a small growth in Revenue. The Revenue has been growing by 2.82% on average per year.
EPS 1Y (TTM)25.47%
EPS 3Y13.92%
EPS 5Y13.66%
EPS Q2Q%39.63%
Revenue 1Y (TTM)6.75%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%13.68%
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 10.92% on average per year.
The Revenue is expected to grow by 5.06% on average over the next years.
EPS Next Y15.2%
EPS Next 2Y12.76%
EPS Next 3Y14.21%
EPS Next 5Y10.92%
Revenue Next Year5.37%
Revenue Next 2Y5.04%
Revenue Next 3Y5.96%
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.
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
RL is valuated rather expensively with a Price/Earnings ratio of 21.33.
RL's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.24, RL is valued a bit cheaper.
The Price/Forward Earnings ratio is 18.23, which indicates a rather expensive current valuation of RL.
The rest of the industry has a similar Price/Forward Earnings ratio as RL.
RL's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 35.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.33 | ||
| Fwd PE | 18.23 |
4.2 Price Multiples
RL's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RL indicates a somewhat cheap valuation: RL is cheaper than 70.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.99 | ||
| EV/EBITDA | 13.6 |
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 14.21% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.4
PEG (5Y)1.56
EPS Next 2Y12.76%
EPS Next 3Y14.21%
5. Dividend
5.1 Amount
RL has a Yearly Dividend Yield of 1.26%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.63, RL pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.26, RL pays less dividend than the S&P500 average, which is at 2.36.
| 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
27.07% 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.
DP27.07%
EPS Next 2Y12.76%
EPS Next 3Y14.21%
285.8
+0.34 (+0.12%)
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-3.36%
Ins Owners3.58%
Ins Owner Change7.37%
Market Cap17.31B
Analysts82.31
Price Target339.04 (18.63%)
Short Float %4.37%
Short Ratio2.29
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)5.63%
PT rev (3m)22.4%
EPS NQ rev (1m)2%
EPS NQ rev (3m)15.53%
EPS NY rev (1m)0%
EPS NY rev (3m)1.83%
Revenue NQ rev (1m)0.71%
Revenue NQ rev (3m)4.79%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)1.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.33 | ||
| Fwd PE | 18.23 | ||
| P/S | 2.45 | ||
| P/FCF | 16.99 | ||
| P/OCF | 14.02 | ||
| P/B | 6.69 | ||
| P/tB | 10.57 | ||
| EV/EBITDA | 13.6 |
EPS(TTM)13.4
EY4.69%
EPS(NY)15.68
Fwd EY5.49%
FCF(TTM)16.82
FCFY5.89%
OCF(TTM)20.39
OCFY7.13%
SpS116.87
BVpS42.74
TBVpS27.03
PEG (NY)1.4
PEG (5Y)1.56
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 | 5.58 |
F-Score8
WACC8.97%
ROIC/WACC1.81
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 Y15.2%
EPS Next 2Y12.76%
EPS Next 3Y14.21%
EPS Next 5Y10.92%
Revenue 1Y (TTM)6.75%
Revenue growth 3Y4.41%
Revenue growth 5Y2.82%
Sales Q2Q%13.68%
Revenue Next Year5.37%
Revenue Next 2Y5.04%
Revenue Next 3Y5.96%
Revenue Next 5Y5.06%
EBIT growth 1Y19.25%
EBIT growth 3Y6.32%
EBIT growth 5Y19.59%
EBIT Next Year35.63%
EBIT Next 3Y17.15%
EBIT Next 5Y12.35%
FCF growth 1Y12.6%
FCF growth 3Y22.89%
FCF growth 5Y16.04%
OCF growth 1Y15.46%
OCF growth 3Y19.94%
OCF growth 5Y10.36%