Ralph Lauren Corporation (RL) A Stock to Buy on Insider Confidence?

The Ralph Lauren Corporation (NYSE:RL) bears won the day, but the reality is that the -0.39 points or -0.31 percent decline gave very little definitive technical indication of where the stock could be headed next. On 07 November, the shares traded at $127.4 with a heavy trade volume of 2.737 million shares. After opening the session at $126, the shares went as high as $128.1 and as low as $120.17, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $10.2 billion and now has 80.17 million shares outstanding. Ralph Lauren Corporation (RL) stock has lost -0.27 percent of market value in 21 trading days.

RL stock has a trailing 3-year beta of 0.67, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $5.27 a share in the trailing twelve months. The stock’s value has surged 22.87 percent year to date (YTD) against a rise of 49.88 percent in 12 month’s time. The company’s shares still trade -13.8 percent away from its 1-year high of $147.79 and 51.83 percent up from 52-week low of $83.91. The average consensus rating on the company is 2.9, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Ralph Lauren Corporation (RL) will probably climb 9.43 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $166-month high price target. This represents a whopping 30.3 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $140, which represents a return potential of 9.89 percent when compared to the closing price of the stock of $127.4 on Wednesday, November 07. The lowest price target for the stock is $112 — slightly more than -12.09 percent from RL’s current share price.

History has shown that shares in Ralph Lauren Corporation have gone up on 19 different earnings reaction days and are predicted to add 0.06 percent when the company reports upcoming earnings. Investors will get their next glimpse of RL’s Q3 earnings on February 06. Analysts are forecasting revenue to climb 0.8 percent to $1.65B in the fiscal third quarter, while earnings are seen soaring by nearly 5.42 percent to $2.14 per share. It earned $2.26 per share, better than the $2.16, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.39B, better than the $1.36B analysts expected. Earnings are estimated to increase by 487.8 percent this year, 9.3 percent next year and continue to increase by 10.45 percent annually for the next 5 years.

Let’s take a look at some insider activity at Ralph Lauren Corporation (NYSE:RL) and see the pattern. The earliest insider trade took place on 08/09/2018. George Michael A gathered a total of 1.82 thousand shares of company at average share price of $137.72. The total for the purchase was set at $249.96 thousand. After this transaction, the Director account balance stood at 2.9 thousand shares. The stock lost -7.21 percent since that insider purchase. On 06/11/2018, Lauren David R., Vice Chair, Chief Innovation, sold 1.76 thousand shares at a price per share of $142.94. This removed 252.15 thousand shares from the insider’s fortune and the stock saw a -10.6 percent retreat in value since the news became public. This transaction left 17.86 thousand shares in the Vice Chair, Chief Innovation account.

On 06/11/2018, Exec. Chair, Chief Creative, 10% Owner Lauren Ralph performed a sale transaction worth $14.24 million. This sale at $142.4 each has eliminated 100 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -10.26 percent decrease since the transaction was reported. The insider now is left with 569.05 thousand shares remaining in the account. Hermann Valerie, who performs the President, Global Brands job, sold 2.4 thousand shares for $218.93 thousand. The disposal occurred on 11/03/2017 was priced at $91.22 per share. The share price soared 40.09 percent since the reporting date. Hermann Valerie now left with a stake of 35.03 thousand RL stock worth $4.46 million after the insider selling.

The stock is currently hovering around the first support level of $122.35. Below this, the next support is placed in the zone of $117.29. Till the time, the RL stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 47.42 on daily chart, which may remain a cause for concern. If the price breaks below $117.29 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $130.28 mark may result into a pull-back move towards $133.15 level.

Further, it is sporting a 1.64 on the Price-to-Sales ratio. Compare this with the industry average P/S of 2.74. 61.1 percent is the gross profit margin for Ralph Lauren Corporation and operating margin sits at 8.6 percent. Along with this, the net profit margin is 3.4 percent.