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Ralph Lauren (RL) Gains As Market Dips: What You Should Know

Zacks Equity Research

Ralph Lauren (RL) closed the most recent trading day at $73.58, moving +0.1% from the previous trading session. This change outpaced the S&P 500's 5.18% loss on the day. At the same time, the Dow lost 6.3%, and the tech-heavy Nasdaq lost 4.7%.

Coming into today, shares of the upscale clothing company had lost 39.05% in the past month. In that same time, the Consumer Discretionary sector lost 32.38%, while the S&P 500 lost 24.68%.

Wall Street will be looking for positivity from RL as it approaches its next earnings report date. In that report, analysts expect RL to post earnings of $0.54 per share. This would mark a year-over-year decline of 49.53%. Our most recent consensus estimate is calling for quarterly revenue of $1.43 billion, down 5.09% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.62 per share and revenue of $6.31 billion, which would represent changes of +5.98% and +0.03%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for RL. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 5.11% lower. RL currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that RL has a Forward P/E ratio of 9.65 right now. Its industry sports an average Forward P/E of 8, so we one might conclude that RL is trading at a premium comparatively.

Meanwhile, RL's PEG ratio is currently 0.81. 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. The Textile - Apparel was holding an average PEG ratio of 1.08 at yesterday's closing price.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 222, putting it in the bottom 13% of all 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.

To follow RL in the coming trading sessions, be sure to utilize Zacks.com.


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