Asia is the fastest-growing division for Ralph Lauren, with China contributing a bulk of the growth in the Asia market. Despite a strong performance in the last few years, China only represents 3.5% of Ralph Lauren’s total global business. With the fundamentals for growth remaining strong in Asia, we expect Asia to be pivotal for the company’s long-term revenue growth, and profitability improvement, as well as to improve shareholder returns. Moreover, Ralph Lauren’s largest segment, North America has struggled over the last couple of years. As a result, importance of Asia to Ralph Lauren is greatly enhanced.
Per Trefis estimates, Ralph Lauren's EPS for fiscal 2020 is likely to be $7.40. Taken together with a P/E of 17.5x, this works to a fair value of $130 for Ralph Lauren’s stock.