RALPH LAUREN CORP (RL)
US7512121010 - Common Stock
Overall RL gets a fundamental rating of 7 out of 10. We evaluated RL against 50 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 correct valuation and a medium growth rate. This makes RL very considerable 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.
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
The Return On Assets of RL (8.39%) is better than 82.00% of its industry peers.
RL has a Return On Equity of 22.86%. This is amongst the best in the industry. RL outperforms 82.00% of its industry peers.
The Return On Invested Capital of RL (11.27%) is better than 82.00% 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 10.04%.
The 3 year average ROIC (8.47%) for RL is below the current ROIC(11.27%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.39% | ||
| ROE | 22.86% | ||
| ROIC | 11.27% |
ROA(3y)4.64%
ROA(5y)5.29%
ROE(3y)13.51%
ROE(5y)13.58%
ROIC(3y)8.47%
ROIC(5y)8.56%
1.3 Margins
RL's Profit Margin of 8.90% is amongst the best of the industry. RL outperforms 88.00% 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 11.72%, 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.
The Gross Margin of RL (65.80%) is better than 94.00% of its industry peers.
RL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.72% | ||
| PM (TTM) | 8.9% | ||
| GM | 65.8% |
OM growth 3Y22.08%
OM growth 5Y2.17%
PM growth 3Y9.15%
PM growth 5Y25.23%
GM growth 3Y3.02%
GM growth 5Y1.31%
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.
RL has less shares outstanding than it did 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 4.50 indicates that RL is not in any danger for bankruptcy at the moment.
RL has a better Altman-Z score (4.50) than 82.00% of its industry peers.
RL has a debt to FCF ratio of 1.83. This is a very positive value and a sign of high solvency as it would only need 1.83 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.83, RL is in the better half of the industry, outperforming 62.00% of the companies in the same industry.
A Debt/Equity ratio of 0.55 indicates that RL is somewhat dependend on debt financing.
RL's Debt to Equity ratio of 0.55 is on the low side compared to the rest of the industry. RL is outperformed by 60.00% of its industry peers.
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 | 0.55 | ||
| Debt/FCF | 1.83 | ||
| Altman-Z | 4.5 |
ROIC/WACC1.25
WACC9%
2.3 Liquidity
RL has a Current Ratio of 2.17. This indicates that RL is financially healthy and has no problem in meeting its short term obligations.
With a Current ratio value of 2.17, RL perfoms like the industry average, outperforming 52.00% of the companies in the same industry.
A Quick Ratio of 1.54 indicates that RL should not have too much problems paying its short term obligations.
RL has a Quick ratio of 1.54. This is in the better half of the industry: RL outperforms 64.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.17 | ||
| Quick Ratio | 1.54 |
3. Growth
3.1 Past
RL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.62%, which is quite good.
Measured over the past 5 years, RL shows a small growth in Earnings Per Share. The EPS has been growing by 6.75% on average per year.
RL shows a small growth in Revenue. In the last year, the Revenue has grown by 2.78%.
RL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.83% yearly.
EPS 1Y (TTM)19.62%
EPS 3Y8.75%
EPS 5Y6.75%
EPS growth Q2Q24.48%
Revenue 1Y (TTM)2.78%
Revenue growth 3Y1.51%
Revenue growth 5Y0.83%
Revenue growth Q2Q5.55%
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 11.42% yearly.
The Revenue is expected to grow by 4.06% on average over the next years.
EPS Next Y26.38%
EPS Next 2Y17.58%
EPS Next 3Y16.58%
EPS Next 5Y11.42%
Revenue Next Year3.96%
Revenue Next 2Y4.16%
Revenue Next 3Y4.38%
Revenue Next 5Y4.06%
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.
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
Based on the Price/Earnings ratio of 17.67, the valuation of RL can be described as rather expensive.
The rest of the industry has a similar Price/Earnings ratio as RL.
RL is valuated rather cheaply when we compare the Price/Earnings ratio to 25.20, which is the current average of the S&P500 Index.
RL is valuated correctly with a Price/Forward Earnings ratio of 14.54.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RL indicates a somewhat cheap valuation: RL is cheaper than 64.00% of the companies listed in the same industry.
RL is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.60, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.67 | ||
| Fwd PE | 14.54 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as RL.
RL's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.84 | ||
| EV/EBITDA | 10.09 |
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 16.58% in the coming years.
PEG (NY)0.67
PEG (5Y)2.62
EPS Next 2Y17.58%
EPS Next 3Y16.58%
5. Dividend
5.1 Amount
RL has a Yearly Dividend Yield of 1.91%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.97, RL pays a bit more dividend than its industry peers.
RL's Dividend Yield is slightly below the S&P500 average, which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.91% |
5.2 History
On average, the dividend of RL grows each year by 7.90%, which is quite nice.
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)7.9%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
33.37% 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.
DP33.37%
EPS Next 2Y17.58%
EPS Next 3Y16.58%
RALPH LAUREN CORP
NYSE:RL (4/24/2024, 1:05:42 PM)
168.07
-0.01 (-0.01%)
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 Cap10.74B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.91% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
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 | 17.67 | ||
| Fwd PE | 14.54 | ||
| 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)0.67
PEG (5Y)2.62
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.39% | ||
| ROE | 22.86% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 11.72% | ||
| PM (TTM) | 8.9% | ||
| GM | 65.8% | ||
| 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 Turnover0.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.17 | ||
| Quick Ratio | 1.54 | ||
| 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)
Growth
EPS 1Y (TTM)19.62%
EPS 3Y8.75%
EPS 5Y
EPS growth Q2Q
EPS Next Y26.38%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)2.78%
Revenue growth 3Y1.51%
Revenue growth 5Y
Revenue growth 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