RL
Ralph Lauren Corporation
$377.78
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 63.2% above fair value
You pay
$377.78
Bear
$188.56
Fair
$231.51
Bull
$269.85
Bear
$188.56
-50.1%
4% stage 1 growth, 12% discount
Fair
$231.51
-38.7%
6% stage 1 growth, 12% discount
Bull
$269.85
-28.6%
8% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
32%
Implied Market Multiple
36.2x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $435.78 from 48 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $231.51 per share.
Warnings
Wall Street's average price target is $435.78 (from 48 analysts). Our estimate is 67% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions