RL
Ralph Lauren Corporation
$380.45
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 63.4% above fair value
You pay
$380.45
Bear
$189.65
Fair
$232.85
Bull
$271.41
Bear
$189.65
-50.2%
4% stage 1 growth, 12% discount
Fair
$232.85
-38.8%
6% stage 1 growth, 12% discount
Bull
$271.41
-28.7%
8% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
32%
Implied Market Multiple
36.4x
Market is pricing in (growth)
19.0%
vs 6.5% base
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 $440.25 from 48 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $232.85 per share.
Warnings
Wall Street's average price target is $440.25 (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