DCF Studio

    RL · NYQ · Consumer Cyclical

    Ralph Lauren Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 205.91

    Market price

    USD 397.53

    Implied upside

    -48.2%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-03-31

    Value Per Share

    Perpetuity growth
    USD 205.91-48.2%
    Exit multiple
    USD 312.90-21.3%
    Market price
    USD 397.53

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 8.7bnUSD 9.1bnUSD 9.6bnUSD 10.0bnUSD 10.4bnUSD 10.8bnUSD 11.2bnUSD 11.6bnUSD 11.9bnUSD 12.2bn+3.8%
    EBITUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.7bn+3.8%
    NOPATUSD 931.4mUSD 979.2mUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.3bn+3.8%
    Add depreciation & amortisationUSD 279.2mUSD 293.6mUSD 307.7mUSD 321.4mUSD 334.8mUSD 347.6mUSD 359.7mUSD 371.0mUSD 381.5mUSD 391.1m+3.8%
    Less capital expenditureUSD -314.1mUSD -338.3mUSD -363.1mUSD -388.2mUSD -413.6mUSD -439.0mUSD -464.3mUSD -489.2mUSD -513.6mUSD -537.3m+6.1%
    Capex, % of revenue3.6%3.7%3.8%3.9%4.0%4.1%4.1%4.2%4.3%4.4%-
    Less increase in working capitalUSD -84.0mUSD -64.9mUSD -63.8mUSD -62.3mUSD -60.3mUSD -57.8mUSD -54.9mUSD -51.4mUSD -47.5mUSD -43.2m-7.1%
    Free cashflow to firmUSD 812.5mUSD 869.6mUSD 907.0mUSD 943.1mUSD 977.5mUSD 1.0bnUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.1bn+3.6%
    Discount factor0.95640.87480.80020.73190.66950.61240.56010.51230.46860.4287-
    Present valueUSD 777.1mUSD 760.7mUSD 725.8mUSD 690.3mUSD 654.4mUSD 618.5mUSD 582.7mUSD 547.2mUSD 512.3mUSD 478.0m-
    Present Value Of The ForecastUSD 6.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.202Reported 1.302, pulled toward 1.0 (Blume)
    Cost of equity9.98%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 23.9x interest cover. Book interest / average debt was lower, at 1.9%.
    Market capitalisationUSD 23.7bn88.7% of capital
    Total debtUSD 3.0bn11.3% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC9.33%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 205.91

    54% of EV

    Forecast FCFF, final year
    USD 1.1bn
    Capex at depreciation, working capital in reinvestment
    USD 1.3bn
    Less reinvestment at g/ROIC (12.7% of NOPAT)
    USD -168.4m
    Capitalised
    USD 1.2bn
    ROIC (reported)
    19.6%
    Terminal value, undiscounted
    USD 17.3bn
    Terminal value, discounted
    USD 7.4bn
    Enterprise value
    USD 13.8bn
    Less net debt
    USD 944.4m
    Equity value
    USD 12.8bn

    Exit at 16.1x EBITDA

    Value per shareUSD 312.90

    69% of EV

    Terminal value, undiscounted
    USD 32.9bn
    Terminal value, discounted
    USD 14.1bn
    Enterprise value
    USD 20.4bn
    Less net debt
    USD 944.4m
    Equity value
    USD 19.5bn

    Spread between methods: 41%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.33%273.31283.79296.70312.90333.65
    8.33%230.32236.29243.49252.27263.11
    9.33%198.41201.82205.91210.82216.76
    10.33%173.80175.69177.96180.69183.97
    11.33%154.25155.20156.37157.80159.55

    Outlined: this model. Green text: above today's price of 397.53. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year8.0%4.1%12.4%
    EBIT margin16.0%13.6%25.0%
    Discount rate-9.3%6.1%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.