Equity valuation

: Ralph Lauren Corp.

Abstract

This dissertation was developed with the purpose of performing a valuation of Ralph Lauren Corp. and to arrive at a reasonable and fair value for the company’s stock, along with a buy, hold or sell recommendation. The valuation methods used in this dissertation consider macroeconomic events that impact Ralph Lauren Corp. and incorporates industry trends along with the company’shistorical financial performance. Two methods were used to arrive at a fair value for Ralph Lauren Corp., those being a Discounted Cash Flow Model and a Relative Valuation Model. After developing the two methods, it was possible to arrive a final target price of 127.84$ as of the 31st of March of 2023 which results in a BUY recommendation for Ralph Lauren’s stock. To complement the Discounted Cash Flow valuation, both a sensitivity analysis and a scenario analysis were conducted to assess the sensitivity of the share price to changes in the WACC and Nominal GDP Growth, and to account for different scenarios that can impact Ralph Lauren Corp. At the end, a comparison with an Investment Bank report was conducted in which it was concluded that the target price of the investment bank report of 138$ (as of 01­02­2022) resulted in a similar recommendation as the one from the models developed in this dissertation.

Date of Award	30 Jun 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)