Short sellers have been piling on RL
The shares of Ralph Lauren Corp (NYSE:RL) are down 3.2% to trade at $100.53 at last check, after the company elected Wei Zhang to is board of directors, which is now made up of 13 members. In late October, Ralph Lauren also announced a partnership with Epic Games, which is owned China-based Tencent Music Entertainment Group (TME), to debut a digital apparel and accessories line for its online game Fortnite.
Ralph Lauren stock surged to its highest level since early June on Friday, conquering the 180-day moving average in the process, which is poised to contain today’s pullback. Additionally, the security blasted through a long-term ceiling at the $99 area, which had been capping the shares since August. RL has added 18.4% quarter-to-date, but is still down 15.4% in 2022.
Shorts have been piling on the equity of late. Short interest is up 13.2% in the most recent reporting period, and the 4.02 million shares sold short make up 9.6% of the stock’s available float.
RL now trades at a forward price-earnings ratio of 13.6, and a price-sales ratio of 1.17, both of which are normal figures for the business’ level of output. Nonetheless, Ralph Lauren is estimated to see just a 0.8% increase in revenue ,and a 7.9% decrease in earnings for 2023.
The retail name is expected to resume growth in 2024, with estimates of a 4.4% pop in revenue and 14.8% increase in earnings. The company also maintains a manageable balance sheet, with $1.42 billion in cash and $2.76 billion in total debt. It’s also worth noting RL offers a decent dividend yield of 2.96%, at a forward dividend of $3.00, potentially making the stock best suited for the long-term.