Ralph Lauren (RL) outpaces stock market gains: What you should know

Ralph Lauren (RL – Free Report) ended the recent trading session at $370.06, demonstrating a +1.19% change from the preceding day’s closing price. The stock’s change was more than the S&P 500’s daily gain of 0.79%. Elsewhere, the Dow gained 0.14%, while the tech-heavy Nasdaq added 1.38%.

Shares of the upscale clothing company witnessed a gain of 10.53% over the previous month, beating the performance of the Consumer Discretionary sector with its gain of 2.39%, and the S&P 500’s gain of 0.87%.

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 $5.75, showcasing a 19.29% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $2.3 billion, indicating a 7.27% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $15.41 per share and revenue of $7.75 billion, which would represent changes of +24.98% and +9.54%, respectively, from the prior year.

Investors should also take note of any recent adjustments to analyst estimates for Ralph Lauren. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, 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. Over the past month, the Zacks Consensus EPS estimate has remained steady. As of now, Ralph Lauren holds a Zacks Rank of #2 (Buy).

Investors should also note Ralph Lauren’s current valuation metrics, including its Forward P/E ratio of 23.74. This valuation marks a premium compared to its industry average Forward P/E of 17.93.

Also, we should mention that RL has a PEG ratio of 1.77. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The average PEG ratio for the Textile – Apparel industry stood at 2.85 at the close of the market yesterday.

The Textile – Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 42, putting it in the top 18% of all 250+ industries.

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

Don’t forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.