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EL

Estée Lauder Companies NYSE:EL Stock Report

Last Price

US$270.36

Market Cap

US$96.6b

7D

-1.1%

1Y

-17.3%

Updated

11 Aug, 2022

Data

Company Financials +
EL fundamental analysis
Snowflake Score
Valuation3/6
Future Growth2/6
Past Performance5/6
Financial Health6/6
Dividends3/6

EL Stock Overview

The Estée Lauder Companies Inc. manufactures, markets, and sells skin care, makeup, fragrance, and hair care products worldwide.

Estée Lauder Companies Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Estée Lauder Companies
Historical stock prices
Current Share PriceUS$270.36
52 Week HighUS$374.20
52 Week LowUS$225.39
Beta0.97
1 Month Change10.67%
3 Month Change12.47%
1 Year Change-17.27%
3 Year Change54.11%
5 Year Change174.98%
Change since IPO3,034.61%

Recent News & Updates

Jul 22

Why We Prefer Estée Lauder To L'Oréal

Both L'Oréal and Estée Lauder have delivered impressive returns to investors, both outperforming by a wide margin the S&P 500 in the last 20 years. Estée Lauder has certainly been growing at a faster pace, with growth over the last decade almost twice that of L'Oréal. Both companies are trading at similar multiples of annual free cash flow, and while both seem elevated, we believe Estée Lauder offers more value given its historically higher growth. Both L'Oréal (OTCPK:LRLCY) and Estée Lauder (EL) are beauty powerhouses with some of the world's most prestigious brands. Here we do a deep dive into both companies to see which one is the better option for investors. While L'Oréal was born in Europe and Estée Lauder in the US, both have become global companies that are increasingly competing for the same markets, and have to keep innovating to be able to continue to grow. Historically, both companies have delivered impressive returns to investors, both outperforming the S&P 500 in the last 20 years. It is, however, Estée Lauder the one that has delivered the most impressive returns by a wide margin. Data by YCharts Brands L'Oréal has an impressive group of brands that covers a lot of different market segments. From luxury with brands such as Prada, Armani, and Valentino, to more everyday brands such as Garnier and Maybelline. L'Oréal Investor Presentation Fortunately for Estée Lauder, it has more than enough to compete, with a brand ensemble that goes from classic to progressive, and from entry price point to premium. Some of the best-known Estée Lauder brands include MAC, Clinique, and the namesake Estée Lauder. Estée Lauder Investor Presentation Financials Results Estée Lauder had a little bit of a hiccup when they reported results last quarter, the reason being that they slashed sales guidance. This made shares fall significantly despite a beat on bottom line figures for the company's fiscal third quarter and only a narrow miss on revenue estimates. It will be very interesting what level of revenue they report when they announce Q4 earnings on August 18th. The consensus EPS Estimate according to the average compiled by Seeking Alpha of 23 analysts is $0.36 (-53.78% Y/Y) and the consensus Revenue Estimate is $3.48B (-11.57% Y/Y) according to an average of 18 analysts. Some deterioration is therefore expected when compared to the previous year, but what is likely to be much more important is the forward guidance they provide. Meanwhile, L'Oréal is scheduled to post Fiscal Q2 results on July 28th, Revenue is expected to be 9.28B (+2.95% Y/Y) according to the average compiled by Seeking Alpha of 4 analysts. There are no EPS estimates for the quarter. Given the low expectations for the quarter already, as is the case with Estée Lauder, it is likely that investors will react more to the forward guidance than to the results themselves. Operating Margins While both companies have very attractive operating margins, which have been rising significantly over the last decade, it is L'Oréal that wins here, with higher and more stable margins compared to Estée Lauder. We believe the reason is that L'Oréal benefits more from operating leverage, given that it has a much larger revenue base. Data by YCharts Growth L'Oréal is a much bigger company than Estée Lauder, with more than 2x the revenue. It is, therefore, more difficult for L'Oréal to move the needle in terms of growth with new products. Data by YCharts In any case, Estée Lauder has certainly been growing at a faster pace, with growth over the last decade almost twice that of L'Oréal. This is a big point in favor of Estée Lauder versus L'Oréal. Data by YCharts Balance Sheet Both Estée Lauder and L'Oréal have strong balance sheets with very moderate leverage. Estée Lauder has debt to EBITDA of ~1.4x, while L'Oréal's leverage is even lower at just ~0.3x. In any case, we are not worried about either balance sheet. Both companies have about $5 billion in long-term debt, and Estée Lauder has also about $5 billion in cash and short-term investments, while L'Oréal has roughly $3 billion in cash and short-term investments. In terms of the balance sheet, we think it is basically a tie, as both are in pretty good shape. Data by YCharts Valuation Both companies are trading at similar multiples of annual free cash flow, and while both seem elevated, we believe Estée Lauder offers more value given its historically higher growth rate. Data by YCharts In terms of dividends, L'Oréal yields a little bit more, with a current dividend yield of ~1.4%, while Estée Lauder is yielding ~0.9%. One thing to consider, however, is that Estée Lauder is an aggressive buyer of its own shares. When combining the net share buyback yield with the dividend yield, Estée Lauder has a much more attractive net common payout yield of ~3.5%.

Jul 08
With EPS Growth And More, Estée Lauder Companies (NYSE:EL) Makes An Interesting Case

With EPS Growth And More, Estée Lauder Companies (NYSE:EL) Makes An Interesting Case

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even...

Shareholder Returns

ELUS Personal ProductsUS Market
7D-1.1%-1.3%1.3%
1Y-17.3%-20.3%-11.7%

Return vs Industry: EL exceeded the US Personal Products industry which returned -20.4% over the past year.

Return vs Market: EL underperformed the US Market which returned -11.6% over the past year.

Price Volatility

Is EL's price volatile compared to industry and market?
EL volatility
EL Average Weekly Movement5.6%
Personal Products Industry Average Movement10.8%
Market Average Movement7.8%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: EL is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: EL's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
194648,670Fabrizio Fredahttps://www.elcompanies.com

The Estée Lauder Companies Inc. manufactures, markets, and sells skin care, makeup, fragrance, and hair care products worldwide. The company offers a range of skin care products, including moisturizers, serums, cleansers, toners, body care, exfoliators, acne care and oil correctors, facial masks, cleansing devices, and sun care products; and makeup products, such as lipsticks, lip glosses, mascaras, foundations, eyeshadows, nail polishes, and powders, as well as compacts, brushes, and other makeup tools. It also provides fragrance products in various forms comprising eau de parfum sprays and colognes, as well as lotions, powders, creams, candles, and soaps; and hair care products that include shampoos, conditioners, styling products, treatment, finishing sprays, and hair color products, as well as sells ancillary products and services.

Estée Lauder Companies Fundamentals Summary

How do Estée Lauder Companies's earnings and revenue compare to its market cap?
EL fundamental statistics
Market CapUS$96.61b
Earnings (TTM)US$3.36b
Revenue (TTM)US$18.11b

28.8x

P/E Ratio

5.3x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
EL income statement (TTM)
RevenueUS$18.11b
Cost of RevenueUS$4.23b
Gross ProfitUS$13.88b
Other ExpensesUS$10.52b
EarningsUS$3.36b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 18, 2022

Earnings per share (EPS)9.39
Gross Margin76.62%
Net Profit Margin18.53%
Debt/Equity Ratio78.4%

How did EL perform over the long term?

See historical performance and comparison

Dividends

0.9%

Current Dividend Yield

24%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is EL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for EL?

Other financial metrics that can be useful for relative valuation.

EL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue5.6x
Enterprise Value/EBITDA22.7x
PEG Ratio2.9x

Price to Earnings Ratio vs Peers

How does EL's PE Ratio compare to its peers?

EL PE Ratio vs Peers
The above table shows the PE ratio for EL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average38x
OLPX Olaplex Holdings
35.2x23.2%US$9.7b
COTY Coty
51.7x5.0%US$6.2b
HLF Herbalife Nutrition
8.3x8.4%US$2.8b
BRBR BellRing Brands
56.7x39.3%US$3.3b
EL Estée Lauder Companies
28.8x10.1%US$96.6b

Price-To-Earnings vs Peers: EL is good value based on its Price-To-Earnings Ratio (28.8x) compared to the peer average (38x).


Price to Earnings Ratio vs Industry

How does EL's PE Ratio compare vs other companies in the US Personal Products Industry?

Price-To-Earnings vs Industry: EL is expensive based on its Price-To-Earnings Ratio (28.8x) compared to the US Personal Products industry average (17x)


Price to Earnings Ratio vs Fair Ratio

What is EL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

EL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio28.8x
Fair PE Ratio41.6x

Price-To-Earnings vs Fair Ratio: EL is good value based on its Price-To-Earnings Ratio (28.8x) compared to the estimated Fair Price-To-Earnings Ratio (41.6x).


Share Price vs Fair Value

What is the Fair Price of EL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: EL ($270.36) is trading below our estimate of fair value ($297.37)

Significantly Below Fair Value: EL is trading below fair value, but not by a significant amount.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is Estée Lauder Companies forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


10.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EL's forecast earnings growth (10.1% per year) is above the savings rate (1.9%).

Earnings vs Market: EL's earnings (10.1% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: EL's earnings are forecast to grow, but not significantly.

Revenue vs Market: EL's revenue (7.8% per year) is forecast to grow slower than the US market (8% per year).

High Growth Revenue: EL's revenue (7.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EL's Return on Equity is forecast to be very high in 3 years time (50.5%).


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Past Performance

How has Estée Lauder Companies performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


19.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: EL has a high level of non-cash earnings.

Growing Profit Margin: EL's current net profit margins (18.5%) are higher than last year (9.4%).


Past Earnings Growth Analysis

Earnings Trend: EL's earnings have grown by 19.1% per year over the past 5 years.

Accelerating Growth: EL's earnings growth over the past year (141.4%) exceeds its 5-year average (19.1% per year).

Earnings vs Industry: EL earnings growth over the past year (141.4%) exceeded the Personal Products industry 20.7%.


Return on Equity

High ROE: EL's Return on Equity (47.8%) is considered outstanding.


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Financial Health

How is Estée Lauder Companies's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: EL's short term assets ($9.5B) exceed its short term liabilities ($5.4B).

Long Term Liabilities: EL's short term assets ($9.5B) exceed its long term liabilities ($8.9B).


Debt to Equity History and Analysis

Debt Level: EL's net debt to equity ratio (23.9%) is considered satisfactory.

Reducing Debt: EL's debt to equity ratio has reduced from 94.1% to 78.4% over the past 5 years.

Debt Coverage: EL's debt is well covered by operating cash flow (51.1%).

Interest Coverage: EL's interest payments on its debt are well covered by EBIT (27.4x coverage).


Balance Sheet


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Dividend

What is Estée Lauder Companies's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


0.89%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: EL's dividend (0.89%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.5%).

High Dividend: EL's dividend (0.89%) is low compared to the top 25% of dividend payers in the US market (4.05%).


Stability and Growth of Payments

Stable Dividend: EL's dividend payments have been volatile in the past 10 years.

Growing Dividend: EL's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (24.3%), EL's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (44.8%), EL's dividend payments are well covered by cash flows.


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Management

How experienced are the management team and are they aligned to shareholders interests?

7.4yrs

Average management tenure


CEO

Fabrizio Freda (65 yo)

14.42yrs

Tenure

US$65,996,985

Compensation

Mr. Fabrizio Freda has been the Chief Executive Officer and Director of The Estée Lauder Companies Inc. since July 1, 2009 and has been its President since 2008. Previously, Mr. Freda served as Chief Opera...


CEO Compensation Analysis

Compensation vs Market: Fabrizio's total compensation ($USD66.00M) is above average for companies of similar size in the US market ($USD12.88M).

Compensation vs Earnings: Fabrizio's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: EL's management team is seasoned and experienced (7.4 years average tenure).


Board Members

Experienced Board: EL's board of directors are seasoned and experienced ( 18.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: EL insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The Estée Lauder Companies Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: The Estée Lauder Companies Inc.
  • Ticker: EL
  • Exchange: NYSE
  • Founded: 1946
  • Industry: Personal Products
  • Sector: Household
  • Implied Market Cap: US$96.612b
  • Shares outstanding: 357.35m
  • Website: https://www.elcompanies.com

Number of Employees


Location

  • The Estée Lauder Companies Inc.
  • 767 Fifth Avenue
  • New York
  • New York
  • 10153
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/11 00:00
End of Day Share Price2022/08/11 00:00
Earnings2022/03/31
Annual Earnings2021/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.