Polo Ralph Lauren - Momentum Stock Buy

Polo Ralph Lauren Corp. (RL) recently reported solid second-quarter results that were better than expected, pushing the company’s share price close to its 52-week high.

Company Description

Ralph Lauren Corp., together with its subsidiaries, designs and sells clothes and lifestyle products worldwide. The company was founded in 1967 and has a market cap of $6.48 billion.

As the economy shows signs of improving and consumers spring back to life, investors have anticipated an up tick in strong retail brands like Ralph Lauren. That and the company’s better than expected second-quarter results, reported on August 5, have helped push shares of RL back to within striking distance of the 52-week high.

Second-Quarter Results

Sales were down 8% from last to $1.02 billion, but earnings came in ahead of expectations at 76 cents per share, 27 cents better than the Zacks Consensus Estimate.

CEO Ralph Lauren said that the company’s distribution model and diversified product strategy that focuses on different customer segments has helped buoy its sales and drive profits.

Estimates Jump

After the solid quarter estimates jumped, with the current year adding 20 cents and advancing to $3.67 per share. The next-year estimate is up 31 cents to $4.15, a 13% growth projection.

Valuation

Based on the current-year estimate, this stock trades with a P/E multiple of 18X, in line with the overall market.

The Chart

Shares of RL have doubled since bottoming out in March just above $31, having recently topped off above $71. Take a look at the chart below.

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