Here's What To Expect This Morning From Ralph Lauren

May. 9.14 | About: Polo Ralph (RL)

Polo Ralph Lauren Corp. (NYSE:RL) is set to report FQ4 2014 earnings before the market opens on Friday, May 9th. Ralph Lauren is a designer and seller of high end clothing, accessories, and fragrances. This quarter Wall Street is expecting Ralph Lauren to post an earnings gain of 23 cents per share and revenue growth of 11.5% compared to the same quarter of last year. Here’s what investors are expecting from Ralph Lauren.

The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.

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(Click Here to see Estimates and Interactive Features for Ralph Lauren)

The current Wall Street consensus expectation is for Ralph Lauren to report $1.64 EPS and $1.832B revenue while the current Estimize.com consensus from 12 Buy Side and Independent contributing analysts is $1.66 EPS and $1.830B in revenue. This quarter the buy-side as represented by the Estimize.com community is expecting Ralph Lauren to beat EPS estimates from Wall Street by 2c per share but also miss revenue expectations by $2 million.

Over the past 6 quarters the consensus from Estimize.com has been more accurate than Wall Street in forecasting Ralph Lauren’s EPS and revenue 5 times and once respectively. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors Estimize has created a data set that is more accurate than Wall Street up to 69.5% of the time.

More importantly it does a better job of representing the market’s actual expectations. It has been confirmed by Deutsche Bank Quant. Research and an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.

The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing a smaller than usual differential between the expectations of Wall Street and Estimize.

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The distribution of estimates published by analysts on the Estimize.com platform range from $1.58 to $1.72 EPS and from $1.789B to $1.850B in revenues. This quarter we’re seeing a small to moderate range of estimates on Ralph Lauren compared to previous quarters.

The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A narrow distribution of estimates signals more agreement in the market, which could mean less volatility post earnings.

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Throughout the quarter the Wall Street EPS consensus fell from $1.80 to $1.64 while the Estimize consensus also dropped from $1.67 to $1.66. Meanwhile the Wall Street revenue consensus rose early in the period before flattening out and ending the period at $1.832B while the Estimize consensus decreased before rising from a low of $1.823B to $1.830B. Timeliness is correlated with accuracy and the directionality of analyst revisions are often a leading indicator. Members ofthe Estimize community are revising their revisions upward going into the report which is often a bullish indicator.

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The analyst with the highest estimate confidence rating this quarter is turbinecity who projects $1.65 EPS and $1.835B in revenue. turbinecity was the Estimize Winter 2014 season winner and is ranked 3rd overall among over 4,450 contributing analysts. This season alone turbinecity has been more accurate than Wall Street in forecasting EPS and revenue 61% and 51% of the time respectively throughout 1021 estimates.

Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case turbinecity is expecting Ralph Lauren to beat the Wall Street consensus by a small margin on both EPS and revenue but fail to live up to the Estimize community’s consensus on earnings..

Friday morning contributing analysts on the Estimize.com platform are expecting Ralph Lauren to miss Wall Street’s revenue expectations by a negligable margin while beating earnings expectations by 2 cents per share. This quarter another period of solid earnings growth is expected from Ralph Lauren, however Michael Kors Holdings (NYSE:KORS) is expected to steal the show again in high end fashion retail.