NYSE:EL

Stock Analysis Report

Estée Lauder Companies

Executive Summary

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


Snowflake Analysis

Proven track record average dividend payer.


Similar Companies

Share Price & News

How has Estée Lauder Companies's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: EL has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.7%

EL

-2.5%

US Personal Products

-1.1%

US Market


1 Year Return

31.6%

EL

15.7%

US Personal Products

17.9%

US Market

Return vs Industry: EL exceeded the US Personal Products industry which returned 15.7% over the past year.

Return vs Market: EL exceeded the US Market which returned 17.9% over the past year.


Shareholder returns

ELIndustryMarket
7 Day-2.7%-2.5%-1.1%
30 Day1.9%1.9%1.4%
90 Day7.5%5.3%6.9%
1 Year33.0%31.6%17.4%15.7%20.3%17.9%
3 Year157.7%149.9%66.5%58.6%47.8%38.3%
5 Year168.3%153.1%65.4%48.3%71.9%53.0%

Price Volatility Vs. Market

How volatile is Estée Lauder Companies's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Estée Lauder Companies undervalued compared to its fair value and its price relative to the market?

6.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: EL ($209.27) is trading below our estimate of fair value ($224.77)

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


Price To Earnings Ratio

PE vs Industry: EL is poor value based on its PE Ratio (40.6x) compared to the Personal Products industry average (16x).

PE vs Market: EL is poor value based on its PE Ratio (40.6x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: EL is poor value based on its PEG Ratio (2.6x)


Price to Book Ratio

PB vs Industry: EL is overvalued based on its PB Ratio (16.4x) compared to the US Personal Products industry average (1.9x).


Next Steps

Future Growth

How is Estée Lauder Companies forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

15.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EL's forecast earnings growth (15.8% per year) is above the savings rate (1.7%).

Earnings vs Market: EL's earnings (15.8% per year) are forecast to grow faster than the US market (14.1% per year).

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

Revenue vs Market: EL's revenue (7.1% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: EL's revenue (7.1% 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 (53.3%).


Next Steps

Past Performance

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

10.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EL has high quality earnings.

Growing Profit Margin: EL's current net profit margins (11.8%) are higher than last year (11.5%).


Past Earnings Growth Analysis

Earnings Trend: EL's earnings have grown by 10.6% per year over the past 5 years.

Accelerating Growth: EL's earnings growth over the past year (14.3%) exceeds its 5-year average (10.6% per year).

Earnings vs Industry: EL earnings growth over the past year (14.3%) underperformed the Personal Products industry 21.4%.


Return on Equity

High ROE: Whilst EL's Return on Equity (40.73%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Estée Lauder Companies's financial position?


Financial Position Analysis

Short Term Liabilities: EL's short term assets ($8.3B) exceed its short term liabilities ($5.0B).

Long Term Liabilities: EL's short term assets ($8.3B) do not cover its long term liabilities ($8.4B).


Debt to Equity History and Analysis

Debt Level: EL's debt to equity ratio (112.3%) is considered high.

Reducing Debt: EL's debt to equity ratio has increased from 36.3% to 112.3% over the past 5 years.

Debt Coverage: EL's debt is well covered by operating cash flow (48.4%).

Interest Coverage: EL's interest payments on its debt are well covered by EBIT (38.5x coverage).


Balance Sheet

Inventory Level: EL has a high level of physical assets or inventory.

Debt Coverage by Assets: EL's debt is covered by short term assets (assets are 1.6x debt).


Next Steps

Dividend

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

0.92%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Estée Lauder Companies before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company0.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.4%forecastin3Years1.0%

Current dividend yield vs market & industry

Notable Dividend: EL's dividend (0.92%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: EL's dividend (0.92%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: EL's dividends per share have been stable in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34.3%), EL's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: EL's dividends in 3 years are forecast to be well covered by earnings (32.4% payout ratio).


Next Steps

Management

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

7.5yrs

Average management tenure


CEO

Fabrizio Freda (62yo)

10.6yrs

Tenure

US$21,435,428

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 ($USD21.44M) is above average for companies of similar size in the US market ($USD10.81M).

Compensation vs Earnings: Fabrizio's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
William Lauder
Executive Chairman10.6yrsUS$9.52m2.37% $1.8b
Fabrizio Freda
President10.6yrsUS$21.44m0.019% $14.3m
Tracey Travis
Executive VP of Finance & CFO7.5yrsUS$7.54m0.0087% $6.6m
John Demsey
Executive Group President4.1yrsUS$9.37m0.0033% $2.5m
Cedric Prouve
Group President of International17.1yrsUS$10.23m0.062% $46.5m
Deborah Krulewitch
Senior Vice President of Corporate Administration0yrsno datano data
Laraine Mancini
Senior Vice President of Investor Relations1.8yrsno datano data
Deirdre Stanley
Executive VP & General Counsel0.3yrsno datano data
Alexandra Trower
Executive Vice President of Global Communications11.8yrsno data0.0040% $3.0m
Georgia Garinois-Melenikiotou
Executive Vice President of Corporate Marketing0yrsno datano data

7.5yrs

Average Tenure

59yo

Average Age

Experienced Management: EL's management team is seasoned and experienced (7.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
William Lauder
Executive Chairman10.6yrsUS$9.52m2.37% $1.8b
Fabrizio Freda
President10.6yrsUS$21.44m0.019% $14.3m
Leonard Lauder
Chairman Emeritus & Director10.6yrsUS$2.86m0.17% $125.8m
Ronald Lauder
Director3.3yrsno data2.73% $2.1b
Irvine Hockaday
Presiding Director0yrsUS$320.46k0.0033% $2.5m
Rose Bravo
Independent Director16.8yrsUS$282.96k0.0022% $1.7m
Richard Parsons
Director21.1yrsUS$290.96kno data
Richard Zannino
Independent Director10.1yrsUS$311.96kno data
Charlene Barshefsky
Independent Director19.1yrsUS$327.37k0.017% $12.9m
Lynn De Rothschild
Independent Director20.1yrsUS$282.96k0.0011% $835.2k

10.6yrs

Average Tenure

68yo

Average Age

Experienced Board: EL's board of directors are seasoned and experienced ( 10.6 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 company bio, 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
  • Market Cap: US$75.241b
  • Shares outstanding: 359.54m
  • 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

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ELNYSE (New York Stock Exchange)YesClass A Common StockUSUSDNov 1995
ELAADB (Deutsche Boerse AG)YesClass A Common StockDEEURNov 1995
EL *BMV (Bolsa Mexicana de Valores)YesClass A Common StockMXMXNNov 1995
0JTMLSE (London Stock Exchange)YesClass A Common StockGBUSDNov 1995
ESLAWBAG (Wiener Boerse AG)YesClass A Common StockATEURNov 1995
ELAAETLX (Eurotlx)YesClass A Common StockITEURNov 1995
ELCI34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EA REP 0.5 COM CL 'A'BRBRLMay 2019

Biography

The Estée Lauder Companies Inc. manufactures and markets skin care, makeup, fragrance, and hair care products. 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. The company offers its products under Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, Bobbi Brown, La Mer, Aveda, Jo Malone London, Bumble and bumble, Darphin, Smashbox, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, By Kilian, BECCA, Too Faced, RODIN olio lusso, FLIRT!, Kiton, and Tom Ford brands. It also holds license arrangements for Tommy Hilfiger, Donna Karan New York, DKNY, Michael Kors, Ermenegildo Zegna, Dr. Andrew Weil, TOM FORD BEAUTY, AERIN, and Tory Burch brands. The company sells its products through department stores, specialty-multi retailers, upscale perfumeries and pharmacies, and salons and spas; freestanding stores; its own and authorized retailer Websites; third-party online malls; stores in airports and on cruise ships; in-flight and duty-free shops; and self-select outlets. It has operations in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The Estée Lauder Companies Inc. was founded in 1946 and is headquartered in New York, New York. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 00:59
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


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.