Back to top

Image: Bigstock

Ralph Lauren (RL) Increases Yet Falls Behind Market: What Investors Need to Know

Read MoreHide Full Article

In the latest trading session, Ralph Lauren (RL - Free Report) closed at $184.76, marking a +0.63% move from the previous day. This change lagged the S&P 500's 1.7% gain on the day. Meanwhile, the Dow experienced a rise of 1.26%, and the technology-dominated Nasdaq saw an increase of 2.51%.

Shares of the upscale clothing company have appreciated by 7.92% over the course of the past month, outperforming the Consumer Discretionary sector's gain of 2.85% and the S&P 500's gain of 1.27%.

Market participants will be closely following the financial results of Ralph Lauren in its upcoming release. The company is forecasted to report an EPS of $2.37, showcasing a 12.86% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $1.67 billion, indicating a 2.15% growth compared to the corresponding quarter of the prior year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $11.24 per share and revenue of $6.74 billion. These totals would mark changes of +9.02% and +1.62%, respectively, from last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Ralph Lauren. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Ralph Lauren is currently a Zacks Rank #3 (Hold).

With respect to valuation, Ralph Lauren is currently being traded at a Forward P/E ratio of 16.34. This valuation marks a discount compared to its industry's average Forward P/E of 19.27.

It is also worth noting that RL currently has a PEG ratio of 1.5. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Textile - Apparel industry was having an average PEG ratio of 2.01.

The Textile - Apparel industry is part of the Consumer Discretionary sector. At present, this industry carries a Zacks Industry Rank of 171, placing it within the bottom 33% of over 250 industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Ralph Lauren Corporation (RL) - free report >>

Published in