Summary
Company is not making as much money as yesteryear, but growth is on the way.
The dividend at just under 1.9% is safe. Company has just increased it this year by 25%.
Technically, we remain in a solid uptrend. Investors who are long should try and ride this momentum for as long as possible.
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Ralph Lauren (RL) shares have been on a tear since June of last year. The market cap has more or less doubled over the past 15 months. Shares are now trading a good 13%+ above the 200-day moving average which is light years away from the conditions we witnessed back in May 2017 when the very same moving average was well over 30% above the share price at the time.
The question now is whether investors stay with this momentum or take profits up here at around $137 a share. With the firm expected to hit $6.67 in earnings per share this present fiscal year, this would give us a forward earnings multiple of around 20.67. This figure in its own right does not look lofty when compared to the stock's historic average multiples and what the industry, in general, is trading at. If we go by sales, we can see that Ralph Lauren's present sales multiple is 1.8 whereas its 10-year average is 1.7. Therefore, despite the steep rise in the share price recently, I'm not seeing a stretched valuation here.
