| Snowflake Score | |
|---|---|
| Valuation | 3/6 |
| Future Growth | 2/6 |
| Past Performance | 5/6 |
| Financial Health | 6/6 |
| Dividends | 3/6 |
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
| Historical stock prices | |
|---|---|
| Current Share Price | US$270.36 |
| 52 Week High | US$374.20 |
| 52 Week Low | US$225.39 |
| Beta | 0.97 |
| 1 Month Change | 10.67% |
| 3 Month Change | 12.47% |
| 1 Year Change | -17.27% |
| 3 Year Change | 54.11% |
| 5 Year Change | 174.98% |
| Change since IPO | 3,034.61% |
Recent News & Updates
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%.
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
| EL | US Personal Products | US 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
| EL volatility | |
|---|---|
| EL Average Weekly Movement | 5.6% |
| Personal Products Industry Average Movement | 10.8% |
| Market Average Movement | 7.8% |
| 10% most volatile stocks in US Market | 16.9% |
| 10% least volatile stocks in US Market | 3.2% |
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
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1946 | 48,670 | Fabrizio Freda | https://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
| EL fundamental statistics | |
|---|---|
| Market Cap | US$96.61b |
| Earnings (TTM) | US$3.36b |
| Revenue (TTM) | US$18.11b |
28.8x
P/E Ratio5.3x
P/S RatioIs EL overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| EL income statement (TTM) | |
|---|---|
| Revenue | US$18.11b |
| Cost of Revenue | US$4.23b |
| Gross Profit | US$13.88b |
| Other Expenses | US$10.52b |
| Earnings | US$3.36b |
Last Reported Earnings
Mar 31, 2022
Next Earnings Date
Aug 18, 2022
| Earnings per share (EPS) | 9.39 |
| Gross Margin | 76.62% |
| Net Profit Margin | 18.53% |
| Debt/Equity Ratio | 78.4% |
How did EL perform over the long term?
See historical performance and comparisonDividends
0.9%
Current Dividend Yield24%
Payout RatioValuation
Is EL undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
3/6Valuation 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.
| What is EL's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$96.61b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 5.6x |
| Enterprise Value/EBITDA | 22.7x |
| PEG Ratio | 2.9x |
Price to Earnings Ratio vs Peers
How does EL's PE Ratio compare to its peers?
| EL PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 38x | ||
OLPX Olaplex Holdings | 35.2x | 23.2% | US$9.7b |
COTY Coty | 51.7x | 5.0% | US$6.2b |
HLF Herbalife Nutrition | 8.3x | 8.4% | US$2.8b |
BRBR BellRing Brands | 56.7x | 39.3% | US$3.3b |
EL Estée Lauder Companies | 28.8x | 10.1% | 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.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 28.8x |
| Fair PE Ratio | 41.6x |
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
2/6Future 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
5/6Past 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
6/6Financial 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
3/6Dividend 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
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/08/11 00:00 |
| End of Day Share Price | 2022/08/11 00:00 |
| Earnings | 2022/03/31 |
| Annual Earnings | 2021/06/30 |
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.