- Ralph Lauren (RL) boasts strong technical momentum and is trading at new all-time highs.
- Shares have a 100% “Buy” opinion from Barchart and are up 66% over the past year.
- RL fundamentals are solid, as analysts project revenue and earnings growth.
- However, there is reason for caution due to Ralph Lauren’s valuation and macroeconomic risks.
Today’s Featured Stock
Valued at $20.2 billion, Ralph Lauren (RL) is a major designer, marketer, and distributor of premium lifestyle products around the world.
It offers apparel, footwear, accessories, home furnishings, and more. The company possesses a strong portfolio of globally recognized brand names such as Polo Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Collection, Double RL, Lauren Ralph Lauren, Polo Golf Ralph Lauren, Ralph Lauren Golf, RLX Ralph Lauren, Polo Ralph Lauren Children, Chaps, Club Monaco and American Living.
What I’m Watching
I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals; superior current momentum in both strength and direction; and a Trend Seeker “buy” signal. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. RL checks those boxes. Since the Trend Seeker signaled a new “Buy” on Oct. 16, the stock has gained 3.33%.
Barchart Technical Indicators for Ralph Lauren
Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.
Ralph Lauren hit an all-time high of $338.20 in morning trading on Oct. 21.
- RL has a Weighted Alpha of +74.59.
- Ralph Lauren has an 100% “Buy” opinion from Barchart.
- The stock gained 66.16% over the past year.
- RL has its Trend Seeker “Buy” signal intact.
- The stock recently traded at $338.20 with a 50-day moving average of $309.63.
- Ralph Lauren has made 10 new highs and gained 8.24% in the last month.
- Relative Strength Index (RSI) is at 67.48.
- There’s a technical support level around $327.88.
Don’t Forget the Fundamentals
- $20.2 billion market capitalization.
- 24.46x trailing Price/Earnings
- 1.08% dividend yield.
- Revenue is projected to grow 7.07% this year and another 4.78% next year.
- Earnings are estimated to increase by 19.80% this year and an additional 8.88% next year.
Analyst and Investor Sentiment on Ralph Lauren
I don’t buy stocks because everyone else is buying, but I do realize that if major firms and investors are dumping stock, it’s hard to make money swimming against the tide.
It looks like Wall Street analysts like RL, but their price targets have a very wide spread.
- The Wall Street analysts tracked by Barchart have issued 15 “Strong Buy”, 1 “Moderate Buy,” 3 “Hold” and a single “Strong Sell” opinion on the stock with price targets between $205 and $430.
- Value Line rates the stock “Above Average” with a price target of $374.
- CFRA’s MarketScope Advisor rates it a “Hold” but has a price target of $250. Why would they advise you to hold if their price target is a 33% loss?
- Morningstar thinks the stock is 77% overvalued.
- 1,045 investors following the stock on Motley Fool think the stock will beat the market while 342 think it won’t.
- 21,470 investors monitor the stock on Seeking Alpha, which rates the stock a “Hold.”
The Bottom Line on Ralph Lauren
Although Wall Street analysts have 15 “Strong Buy” opinions on the stock, I can’t see buying this one after that big run up in price.
A comment on Seeking Alpha says it all: “Ralph Lauren’s premium valuation, trading at 20x forward earnings, assumes flawless execution amidst macroeconomic risks such as tariffs and fragile U.S. consumer demand, which could impact earnings. Despite strong fundamentals, macroeconomic risks such as tariff impacts, inflation, and consumer fatigue warrant caution, limiting further valuation expansion.”
Today’s Chart of the Day was written by Jim Van Meerten. Read previous editions of the daily newsletter here.
Additional disclosure: The Barchart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.
