RL
Ralph Lauren Corporation$353.35
Sell
Target $302.29
Report: Mar 07, 2026Consumer Cyclical • Apparel - Manufacturers • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$353.35-14.5%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$302.29
(14% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$389.15
52 Week Low$176.61
Avg. 3 Month Volume632K
Efficiency
LTM Gross Margin69.6%
LTM EBITDA Margin18.2%
LTM EBIT Margin15.3%
LTM Operating Margin14.6%
LTM ROA12.3%
LTM ROE34.7%
LTM ROIC21.9%
LTM ROCE22.5%
Capital Structure
Market Cap (MM)$20.8B
Enterprise Value (MM)$21.6B
Shares Outstanding61.10M
Total Debt (MM)$2.84B
Cash & Equivalents (MM)$2.03B
LTM Net Debt (MM)$806.30M
LTM Net Debt/EBITDA0.6x
Growth
TTM Rev. Growth12.7%
Last 3-Yr Rev. CAGR6.8%
Last 3-Yr EBITDA CAGR14.8%
Last 3-Yr EPS CAGR25.3%
Valuation
Street Target Price$428.75
LTM EV/Revenue2.8x
LTM EV/Gross Profit4.0x
LTM EV/EBIT18.1x
LTM EV/EBITDA15.2x
LTM P/E22.7x
LTM EV/FCF31.1x
LTM P/FCF30.0x
LTM P/TB3.0x
LTM P/B7.2x
Dividend Yield1.0%
Payout Ratio23.8%
Executive SummarySituation: Current price is $353.35 versus fair value $302.29 (-14.5% expected return), and valuation confidence is stable. Debate: Bull case depends on Fiscal 2026 Q4 Earnings Release Management has specifically warned of 80-120 bps of operating margin pressure in Q4 due to tariff timing. Bear case centers on Tariff Escalation and Moat Erosion Increased trade barriers could permanently impair the company's pricing power, forcing it to choose between volume loss or margin compression. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
Continued 20%+ growth in Asia and successful penetration of high-potential categories like handbags and outerwear could drive revenue above the 7% base case. If the company maintains its 18% AUR growth trajectory without consumer pushback, margins could expand toward 15% despite tariff pressures.
Bear Case
A 150 basis point margin drag from tariffs and labor inflation could lead to an earnings miss in the second half of fiscal 2026. Additionally, a 'luxury fatigue' among aspirational consumers in North America could stall DTC comparable sales growth, leading to inventory builds and forced discounting.
Key Catalysts
Near-Term (0-6 months)Impact: High
Fiscal 2026 Q4 Earnings Release Management has specifically warned of 80-120 bps of operating margin pressure in Q4 due to tariff timing. A...
Mid-Term (6-18 months)Impact: Moderate
Normalization of Share Repurchase Pace As the stock price remains near all-time highs, the accretive power of buybacks diminishes. A slowdow...
Long-Term (18+ months)Impact: Moderate
Ralph Lauren is at a critical juncture where its valuation (24x P/E) has decoupled from its fundamental margin outlook (flat guidance), maki...
Primary Risks
Concern: High
Tariff Escalation and Moat Erosion Increased trade barriers could permanently impair the company's pricing power, forcing it to choose betwe...
Concern: Medium
Key Person Dependency Founder Ralph Lauren remains the singularly critical visionary for the brand's creative direction.
Concern: Medium
Stewardship is exceptional for a founder-led firm. The presence of Angela Ahrendts as Lead Independent Director provides critical luxury exp...
Recent Activity
2025-08-07SEC Filing (8-K)
-6.48%Ralph Lauren reports Q1 FY2026 results exceeding expectations, raises full year outlook
2025-04-03Press Release
-16.27%Neiman Marcus And Ralph Lauren Unveil Exclusive 'Patchwork Americana' Collection
2025-02-06SEC Filing (8-K)
+9.69%Ralph Lauren reports Q3 FY2025 revenue up 11%, exceeding expectations with strong holiday performance across all regions.
2024-11-07SEC Filing (8-K)
+6.57%Ralph Lauren reports strong Q2 FY2025 results with 6% revenue growth and raises full year outlook
2024-02-08SEC Filing (8-K)
+16.79%Ralph Lauren reports strong Q3 FY2024 holiday results with 6% revenue growth and 31% EPS increase
Valuation Table
9.8/10Decision Grade
Scenario Range
$173
Bear
$249
Base
$304
Bull
$353