Value
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.8 |
| P/S | 8.3 |
| EV/EBITDA | 2.2 |
| Fwd P/E | 6.6 |
| PEG | 4.2 |
| Analyst target | 4.0 |
- ▸Forward P/E: 19.5x
- ▸PEG: 2.29
RL · Why this verdict
Why Ralph Lauren (RL) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Ralph Lauren earns a 35% return on equity, which is exceptional in apparel manufacturing, and is designated a wide economic moat company with compounder quality, reflecting the premium brand positioning that supports sustained above-average returns on capital. Quality breakdown | Return on equity remains above 25% and the Piotroski F-Score stays at 7 or above over the next 4 quarters. | →Stable |
| CounterHigh returns on equity in luxury apparel can compress rapidly if brand perception weakens or consumer trading down during economic downturns reduces demand for premium products. | ||
International revenues represent 59% of total company sales, providing geographic diversification but also creating meaningful exposure to foreign exchange volatility, international consumer spending cycles, and trade policy uncertainty. Bear case | International revenue remains above 50% of total sales and international segment growth exceeds domestic growth in at least 3 of the next 4 quarters. | →Stable |
| CounterHeavy international exposure at 59% means that a strong U.S. dollar or slowdown in European or Asian consumer spending could produce currency-adjusted earnings misses even if the underlying business is performing well. | ||
Ralph Lauren has beaten earnings estimates in all 4 of the last 4 quarters with an average surprise of 8.7%, including beats across both strong and weak consumer environments, demonstrating consistent management ability to outperform consensus. Earnings | Beat streak extends to at least 6 consecutive quarters with average surprise remaining above 5%. | →Stable |
| CounterWith the stock already exceeding analyst consensus price targets, any stumble in earnings execution could produce an outsized price decline from the elevated current price level. | ||
The stock is trading above its 200-day moving average with volume accumulation (rising on-balance volume), MACD trending positive, and momentum scored at 8.0 out of 10, all within 2.2% of its 52-week high, indicating strong price leadership. Momentum breakdown | The stock maintains its position above the 200-day moving average for at least 6 of the next 9 months and achieves a new 52-week high within 6 months. | →Stable |
| CounterAt RSI 64 and near the 52-week high with only 0.2% upside to the near-term resistance target and 6.6% below analyst consensus, the momentum strength is already priced in with minimal near-term price appreciation potential. | ||
Ralph Lauren earns a 35% return on equity, which is exceptional in apparel manufacturing, and is designated a wide economic moat company with compounder quality, reflecting the premium brand positioning that supports sustained above-average returns on capital.
→StableQuality breakdown
- Expectation
- Return on equity remains above 25% and the Piotroski F-Score stays at 7 or above over the next 4 quarters.
CounterHigh returns on equity in luxury apparel can compress rapidly if brand perception weakens or consumer trading down during economic downturns reduces demand for premium products.
International revenues represent 59% of total company sales, providing geographic diversification but also creating meaningful exposure to foreign exchange volatility, international consumer spending cycles, and trade policy uncertainty.
→StableBear case
- Expectation
- International revenue remains above 50% of total sales and international segment growth exceeds domestic growth in at least 3 of the next 4 quarters.
CounterHeavy international exposure at 59% means that a strong U.S. dollar or slowdown in European or Asian consumer spending could produce currency-adjusted earnings misses even if the underlying business is performing well.
Ralph Lauren has beaten earnings estimates in all 4 of the last 4 quarters with an average surprise of 8.7%, including beats across both strong and weak consumer environments, demonstrating consistent management ability to outperform consensus.
→StableEarnings
- Expectation
- Beat streak extends to at least 6 consecutive quarters with average surprise remaining above 5%.
CounterWith the stock already exceeding analyst consensus price targets, any stumble in earnings execution could produce an outsized price decline from the elevated current price level.
The stock is trading above its 200-day moving average with volume accumulation (rising on-balance volume), MACD trending positive, and momentum scored at 8.0 out of 10, all within 2.2% of its 52-week high, indicating strong price leadership.
→StableMomentum breakdown
- Expectation
- The stock maintains its position above the 200-day moving average for at least 6 of the next 9 months and achieves a new 52-week high within 6 months.
CounterAt RSI 64 and near the 52-week high with only 0.2% upside to the near-term resistance target and 6.6% below analyst consensus, the momentum strength is already priced in with minimal near-term price appreciation potential.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Ralph Lauren demonstrates exceptional business quality with a 35% return on equity, wide economic moat, and a perfect 4-for-4 earnings beat streak with an average surprise of 8.7%, but the stock has already exceeded analyst consensus targets with minimal remaining near-term upside and carries 11% short interest.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 7.3 |
| Gross margin | 10.0 |
| Op margin | 5.3 |
| Net margin | 5.8 |
| Current ratio | 7.4 |
| FCF quality | 5.3 |
| Moat | 7.5 |
| Rule of 40 | 3.0 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 35%
- ▸Earnings quality warning: 70% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
6.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.7 |
| EPS growth | 6.0 |
Momentum
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 4.2 |
| MA position | 9.0 |
| Volume | 2.3 |
- ▸Above 200-day MA
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.3 |
| Price target | 6.2 |
| erm sentiment | 5.0 |
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $102,064,266 (0.431% of mkt cap)
Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.8 |
| quality rank | 8.9 |
| growth rank | 6.4 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.8 |
| support resistance | 3.4 |
| 52w position | 8.9 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.8 |
| days to cover | 6.7 |
| volatility | 4.8 |
| put call | 7.1 |
| implied vol | 5.2 |
| beta | 5.6 |
| debt equity | 4.9 |
- ▸Concentration risks: 1 HIGH, 3 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.9 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 94.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:32d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.2<4.5
- ASYMMETRY:-0.3=NEGATIVE
Warning (1)
- INSIDER:0.43%=MODERATE
Reward-to-Risk
-0.26
Upside
-2.9%
Downside
11.1%
Sizing output
AVOID
SetupRange Bound — RSI 54 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.35>1.3
Investment implication
The F-path SELL output reflects an overall score of 5.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 7.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.2<4.5, ASYMMETRY:-0.3=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.26 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 7.0, Catalyst at 6.4, and Growth at 6.3; the weakest are Insider at 3.4, Momentum at 4.2, and Value at 5.0. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.26 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Return On Equity Moat
Trip ifReturn on equity falls below 20% or Piotroski F-Score drops below 6 in any reported period.
- P2Perfect Earnings Beat Streak
Trip ifEarnings surprise falls below -5% in at least 2 of the next 4 quarters.
- P3International Revenue Concentration
Trip ifInternational revenue declines below 45% of total sales or international segment growth falls below -5%.
- P4Strong Momentum Above All Mas
Trip ifStock drops below its 200-day moving average and remains below it for more than 45 consecutive days.