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Ralph Lauren (RL) Exceeds Market Returns: Some Facts to Consider

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Ralph Lauren (RL - Free Report) closed the most recent trading day at $322.38, moving +1.56% from the previous trading session. The stock outperformed the S&P 500, which registered a daily gain of 0.06%. Meanwhile, the Dow experienced a rise of 0.17%, and the technology-dominated Nasdaq saw an increase of 0.39%.

The upscale clothing company's shares have seen an increase of 1.3% over the last month, surpassing the Consumer Discretionary sector's loss of 1.49% and falling behind the S&P 500's gain of 3.94%.

The investment community will be paying close attention to the earnings performance of Ralph Lauren in its upcoming release. The company's earnings per share (EPS) are projected to be $3.34, reflecting a 31.5% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.87 billion, up 8.48% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $14.77 per share and a revenue of $7.51 billion, signifying shifts of +19.79% and +6.06%, respectively, from the last year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Ralph Lauren. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.02% upward. At present, Ralph Lauren boasts a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, Ralph Lauren is holding a Forward P/E ratio of 21.49. For comparison, its industry has an average Forward P/E of 15.44, which means Ralph Lauren is trading at a premium to the group.

One should further note that RL currently holds a PEG ratio of 1.6. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Textile - Apparel industry was having an average PEG ratio of 2.24.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 210, which puts it in the bottom 15% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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 use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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