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Is Ralph Lauren (RL) Stock Undervalued Right Now?

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Ralph Lauren (RL) is a stock many investors are watching right now. RL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors should also recognize that RL has a P/B ratio of 2.35. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 5.60. RL's P/B has been as high as 3.36 and as low as 2.25, with a median of 2.75, over the past year.

Finally, our model also underscores that RL has a P/CF ratio of 15.77. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. RL's current P/CF looks attractive when compared to its industry's average P/CF of 37.08. RL's P/CF has been as high as 45.72 and as low as 15.76, with a median of 22, all within the past year.

These are only a few of the key metrics included in Ralph Lauren's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, RL looks like an impressive value stock at the moment.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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