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Is Ralph Lauren (RL) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Ralph Lauren (RL - Free Report) is a stock many investors are watching right now. RL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 17.23. This compares to its industry's average Forward P/E of 17.63. Over the past 52 weeks, RL's Forward P/E has been as high as 22.44 and as low as 13.44, with a median of 17.82.

Another valuation metric that we should highlight is RL's P/B ratio of 3.10. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 7.05. Within the past 52 weeks, RL's P/B has been as high as 3.36 and as low as 2.24, with a median of 2.97.

Finally, investors will want to recognize that RL has a P/CF ratio of 14.73. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 31.92. Over the past 52 weeks, RL's P/CF has been as high as 25.83 and as low as 11.22, with a median of 19.40.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Ralph Lauren is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RL feels like a great value stock at the moment.


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