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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Ralph Lauren Corporation (XNYS:RL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
RL
Name:
RALPH LAUREN CORPORATION (XNYS:RL)
Sector:
219.40M
Industry:
Apparel Manufacturing
CEO:
Mr. Patrice Louvet
Total Employees:
13,500
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -14.18% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF RALPH LAUREN CORPORATION(RL) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND APPAREL MANUFACTURING INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
90.01
One Month Price Target:
$90.71
Six Month Price Target :
$94.22
Likely Price in One Year's Time:
Ticker:
$98.42
Likely Trading Range Today Under (Normal Volatility)
$89.55
Price Upper limit ($) :
$90.5
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$84.3
This week:
$77.25
This month :
$64.49
Other Primary facts
Market Cap:
6.07B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
67.78M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.8%
-14.43%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$116.50
$104.43
$63.52
$75.59
Medium risk (<10%) entry points
Buy Call
Sell Call
$100.50
Buy Put:
Sell Put:
$97.92
$79.49
$82.10
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
RL
Sharpe Ratio:
0.25%
Comparison:
RL, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -127.78% lower than the industry
& is -89.08% lower than the market/S&P 500 average
Average Returns/Yield of
RL
Daily returns:
0.02%
Weekly returns:
0.08%
Monthly returns:
0.33%
Yearly returns:
-3.61%
Comparison of returns:
Average annual returns/yield (last 3 years) is -210.18% below industry average
Classification:
RL, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.13
Statistical test of Returns:
RL has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.09%
Weekly Volatility:
6.92%
Monthly Volatility:
13.84%
Yearly Volatility:
47.94%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.01%
Volatility in last five trading days has been -35.08% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.34%
Weekly VaR:
-14.18%
Monthly VaR:
-28.35%
How Much Can the price of
RL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$67.61
This translates to price declining to:
$13.50
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
RL is a 100.10% riskier investment compared to the market/S&P 500 & is 71.42% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -13.88% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
RL
Beta in relation to market/S&P 500--1.39
Expected beta in 1 year's time:
0.892
Expected beta in 3 year's time:
1.262
Unlevered (debt free) Beta:
0.773
Beta in relation to Nasdaq (XNAS):
0.828
Beta in relation to all global stocks::
0.697
Beta Comparison & Analysis
Beta of competitors/peers::
1.406
Beta is -1.08% lower than peers
Average Industry Beta:
1.537
Beta is -9.49% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
12.79%
Sustainable growth rate is -5.21% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.087
Alpha is -49.62% below industry average alpha yield
Alpha is -554% below the market average
Analysis of Cost of Capital of
RL
Equity cost of capital:
0.127
Equity cost of capital is -7.30% below industry mean WACC
Unlevered (without debt) cost of capital:
7.05%
Before-tax cost of debt:
1.53%
After-tax cost of debt:
1.21%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.21%
WACC is -17.38% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$91.75
Revenue growth rate per share of (3Y):
2.24
Annual revenue growth rate is -139.90% below industry average
EPS:
$8.08
Expected Annual growth rate of EPS (3Y):
7.68%
Expected future EPS growth rate is -58.40% lower than the Apparel Manufacturing industry
Free cash flow (FCF) per share:
$10.10
Balance sheet equity growth per share: -65.91%
Equity growth rate per share is -399.28% lower than the industry
Debt per share
$40.27
EBITDA per share
$14.43
Valuation Analysis Today of
RL
P/E Ratio:
11.81
P/E Ratio of Competitors/Peers:
14.13
P/E ratio is -16.39% lower than main peers & is -48.81% lower than the industry
Stock price/value with industry average P/E ratio: $186.44
RL is -51.72% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $36.93
Present value of the expected future dividends only: $25.58
P/S (Price to Sales ratio):
0.98
Price to sales ratio is -49.67% below the industry mean
P/B (Price to book value ratio):
2.24
Price to free cash flow: 8.91
Price to free cash flow ratio is -57.61% lower than the industry
Net income growth rate (3Y):
-182.68%
Net income growth rate is -85.11% lower than the industry average net income growth rate
Dividend Analysis
-
Dividend yeild: 3.13%
Previous Dividend: $0.75
Previous adjusted dividend: $0.75
Previous Dividend: $2.81
Expected next dividend best case: $0.78
Expected next dividend worst case: $0.72
Average dividend payment (long-term): $0.70
Average dividend increase/decrease (growth rate) % per period: 1.51%
Expected next dividend payment date: 13/10/2022
Expected next dividend record date: 29/09/2022
Expected next dividend declaration date: 22/08/2022
Previous dividend payment date: 15/07/2022
Previous dividend record date: 07/01/2022
Previous dividend declaration date: 24/05/2022
Dividend History:
2022-06-30--$0.75
2021-12-22--$0.69
2021-06-24--$0.69
2022-03-31--$0.69
2021-09-23--$0.69
2020-03-26--$0.69
Dividend growth rate is -91.21% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
100.43%
Net debt to equity ratio:
34.45%
Debt to assets ratio:
34.28%
Net debt to assets ratio:
11.76%
Debt-to-asset ratio is -39.40% below industry average
Ability to repay debt:
Interest coverage ratio:
18.11
Interest coverage ratio is -90.75% less than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.20%
Analysis of Key Statistics
Correlation of price movement with the market:
0.595
Statistical significance of correlation:
RL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.577
Stock price is 3.15% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.577
Correlation of price movement with Nasdaq (^IXIC):
0.044
Covariance of price movement with the market:
0.078
Kurtosis
4.357
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.084
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
RL
Gross Profit Margin Ratio:
267%
Operating Profit Margin Ratio:
12.84%
Operating profit margin is 117.24% higher than the industry
Net Profit Margin Ratio:
267%
Effective Tax Rate:
20.47%
Effective tax rate is -36.75% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
22.08%
Return on equity (ROE) is 44.81% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.54%
Return on assets (ROA) is 40.74% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
2.07
Current ratio is -9.63% below industry average
Cash Conversion Cycle (days):
-11
Cash conversion cycle is -116.20% below industry average
The remaining useful life of property plant & equipment is: 9.4 years
Stock based compensation to net income ratio:
3.07%
In-depth Efficiency Analysis
Revenue generated per employee:
460.6K
Each employee generates -17% less revenue than industry average revenue per employee
EBITDA generated per employee:
72.4K
Each employee generates 12% more EBITDA than industry average revenue per employee
Profit generated per employee:
44.5K
Each employee generates 11% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
16.3K
Each employee generates -239% less free cash flow than industry average revenue per employee
Assets/Capital per employee
265.5K
Each employee generates -239% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
RL
UNDER ARMOUR, INC. (XNYS:UA)
UNDER ARMOUR, INC. (XNYS:UAA)
TEMPUR SEALY INTERNATIONAL, INC. (XNYS:TPX)
QUANTUMSCAPE CORPORATION (XNYS:QS)
PENSKE AUTOMOTIVE GROUP, INC. (XNYS:PAG)
LITHIA MOTORS, INC. (XNYS:LAD)
WYNDHAM HOTELS & RESORTS, INC. (XNYS:WH)
APTARGROUP, INC. (XNYS:ATR)
AUTOLIV, INC. (XNYS:ALV)
Current Analyst Ratings
Strong buy�0%
Buy�8%
Hold�71%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/2/22
Revenue:
6.22B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.07B
4.15B
-
1.67B
3.31B
-
-
3.31B
5.50M
54.00M
169.30M
977.90M
798.40M
600.10M
754.60M
154.50M
600.10M
Statement of Cash Flow
Date:
Period:
57.20M
Differed Income Tax :
3.80M
Stock Based Compensation :
18.40M
Change in Working Capital :
- 15200.00K
Accounts Receivables:
81.60M
Other Working Capital:
- 14900.00K
Other Non-Cash Items:
18.70M
Net Cash Provided by Operating Activities:
247.60M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 368300.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
6/26/21
2022
Q1
2.60B
368.00M
2.96B
498.00M
803.00M
112.80M
4.38B
2.16B
937.80M
116.60M
-
290.20M
83.20M
3.58B
-
7.96B
370.30M
803.10M
138.30M
9.70M
930.20M
2.11B
2.73B
390.60M
3.13B
-
5.24B
1.30M
5.99B
- 111300.0K
- 3159400.00K
June 26, 2021 at 6:00:00 AM
5.38B
2.72B
7.96B
-
3.53B
936.2M
197.70M
- 28800.00K
- 199400.00K
- 5500.00K
-
- 28800.00K
-
-
- 34300.00K
3.30M
17.20M
2.61B
2.59B
247.60M
- 28200.00K
219.40M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
RL
2023
2024
2025
2026
2027
$117.94
$128.96
$141.02
$154.20
$168.62