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RL vs. LULU: Which Stock Should Value Investors Buy Now?
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Investors interested in stocks from the Textile - Apparel sector have probably already heard of Ralph Lauren (RL - Free Report) and Lululemon (LULU - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Ralph Lauren and Lululemon are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RL has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
RL currently has a forward P/E ratio of 19.30, while LULU has a forward P/E of 49.98. We also note that RL has a PEG ratio of 2.36. 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. LULU currently has a PEG ratio of 2.73.
Another notable valuation metric for RL is its P/B ratio of 3.38. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, LULU has a P/B of 16.51.
These metrics, and several others, help RL earn a Value grade of B, while LULU has been given a Value grade of D.
RL stands above LULU thanks to its solid earnings outlook, and based on these valuation figures, we also feel that RL is the superior value option right now.
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RL vs. LULU: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Textile - Apparel sector have probably already heard of Ralph Lauren (RL - Free Report) and Lululemon (LULU - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Ralph Lauren and Lululemon are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RL has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
RL currently has a forward P/E ratio of 19.30, while LULU has a forward P/E of 49.98. We also note that RL has a PEG ratio of 2.36. 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. LULU currently has a PEG ratio of 2.73.
Another notable valuation metric for RL is its P/B ratio of 3.38. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, LULU has a P/B of 16.51.
These metrics, and several others, help RL earn a Value grade of B, while LULU has been given a Value grade of D.
RL stands above LULU thanks to its solid earnings outlook, and based on these valuation figures, we also feel that RL is the superior value option right now.