Growth Investors Should Buy Ralph Lauren (RL) Now Due to High Earnings Growth, Favorable Cash Flow Growth, and Positive Earnings Estimate Revisions

Investors seeking growth stocks should consider Ralph Lauren (RL) due to its favorable Growth Score, top Zacks Rank, and projected EPS growth of 19.8% this year, significantly higher than the industry average of -7.5%. Additionally, the company's year-over-year cash flow growth of 10.2% is also higher than its peers, with a historical annualized cash flow growth rate of 5.4% over the past 3-5 years. These factors make RL a great growth pick for investors.

Ralph Lauren Corporation (RL), a leading American fashion and lifestyle company, has been a standout performer in the consumer discretionary sector. With a market capitalization of $17.8 billion, RL has shown remarkable growth, outpacing the S&P 500 Index ($SPX) with a 26.9% year-to-date (YTD) increase, compared to the index's 9.9% gain [1].

The company's stock has soared 71.3% over the past 52 weeks, significantly outperforming the SPX's 15.1% gain. Within the sector, the Consumer Discretionary Select Sector SPDR Fund (XLY) has seen only a 25.4% increase over the past year and a 4.2% gain in 2025, trailing behind RL's performance [1].

Ralph Lauren's Q1 fiscal 2026 results, reported on Aug. 7, were impressive. The company posted an adjusted earnings per share (EPS) of $3.77, up 40% year-over-year (YoY) and beating Street estimates. Revenue grew 14% annually to $1.7 billion, driven by a 21% jump in sales in Asia, including over 30% growth in China. The company revised its full-year revenue guidance to low- to mid-single-digit growth [1].

Analysts expect RL to report EPS growth of 19.8% YoY to $14.77 for the current fiscal year, ending in March 2026. The stock has a consensus rating of "Strong Buy," with 14 out of 19 analysts advising a "Strong Buy" rating, reflecting growing bullish conviction [1].

Jefferies maintains a "Buy" rating for RL, with a PEG ratio of 1.45, indicating growth at a reasonable price compared to the industry average. The company's digital sales strategy has driven a 13% increase in global direct-to-consumer comparable store sales, particularly effective in Asia and Europe [2].

Institutional investors are also bullish on RL. Quantitative Investment Management LLC, MassMutual Private Wealth & Trust FSB, Sentry Investment Management LLC, Brooklyn Investment Group, Migdal Insurance & Financial Holdings Ltd., and Parallel Advisors LLC have all increased their stakes in the company during the first quarter [3].

Ralph Lauren's strong financial performance, strategic brand elevation, and digital-first approach make it an attractive growth stock. With a projected EPS growth of 19.8% this year, significantly higher than the industry average of -7.5%, and year-over-year cash flow growth of 10.2%, RL is a great pick for investors seeking growth opportunities.

References:
[1] https://finance.yahoo.com/news/ralph-lauren-corp-stock-analyst-102209228.html
[2] https://site.financialmodelingprep.com/market-news/stock-article-for-68af539ef02aa2a14cdc06d4
[3] https://www.marketbeat.com/instant-alerts/filing-quantitative-investment-management-llc-buys-new-shares-in-ralph-lauren-corporation-rl-2025-08-26/