ESTEE LAUDER COMPANIES-CL A (EL) Stock Fundamental Analysis
NYSE:EL - New York Stock Exchange, Inc. - US5184391044 - Common Stock - Currency: USD
Overall EL gets a fundamental rating of 4 out of 10. We evaluated EL against 35 industry peers in the Personal Care Products industry. While EL is still in line with the averages on profitability rating, there are concerns on its financial health. EL is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year EL was profitable.
EL had a positive operating cash flow in the past year.
EL had positive earnings in each of the past 5 years.
In the past 5 years EL always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of -3.54%, EL is not doing good in the industry: 62.86% of the companies in the same industry are doing better.
The Return On Equity of EL (-16.79%) is worse than 60.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.30%, EL is in line with its industry, outperforming 57.14% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for EL is significantly below the industry average of 16.08%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.54% | ||
| ROE | -16.79% | ||
| ROIC | 6.3% |
ROA(3y)5.84%
ROA(5y)6.89%
ROE(3y)22.7%
ROE(5y)26.57%
ROIC(3y)9.14%
ROIC(5y)9.86%
1.3 Margins
EL's Profit Margin has declined in the last couple of years.
EL's Operating Margin of 9.76% is fine compared to the rest of the industry. EL outperforms 65.71% of its industry peers.
EL's Operating Margin has declined in the last couple of years.
EL's Gross Margin of 73.09% is fine compared to the rest of the industry. EL outperforms 80.00% of its industry peers.
EL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.76% | ||
| PM (TTM) | N/A | ||
| GM | 73.09% |
OM growth 3Y-18.75%
OM growth 5Y-10.71%
PM growth 3Y-47.93%
PM growth 5Y-26.95%
GM growth 3Y-2.09%
GM growth 5Y-1.48%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), EL is creating some value.
EL has more shares outstanding than it did 1 year ago.
EL has less shares outstanding than it did 5 years ago.
EL has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.82 indicates that EL is not a great score, but indicates only limited risk for bankruptcy at the moment.
EL has a Altman-Z score of 2.82. This is comparable to the rest of the industry: EL outperforms 51.43% of its industry peers.
EL has a debt to FCF ratio of 6.36. This is a slightly negative value and a sign of low solvency as EL would need 6.36 years to pay back of all of its debts.
EL has a better Debt to FCF ratio (6.36) than 62.86% of its industry peers.
EL has a Debt/Equity ratio of 1.75. This is a high value indicating a heavy dependency on external financing.
EL has a Debt to Equity ratio of 1.75. This is amonst the worse of the industry: EL underperforms 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.75 | ||
| Debt/FCF | 6.36 | ||
| Altman-Z | 2.82 |
ROIC/WACC0.86
WACC7.31%
2.3 Liquidity
EL has a Current Ratio of 1.37. This is a normal value and indicates that EL is financially healthy and should not expect problems in meeting its short term obligations.
EL's Current ratio of 1.37 is in line compared to the rest of the industry. EL outperforms 42.86% of its industry peers.
EL has a Quick Ratio of 1.37. This is a bad value and indicates that EL is not financially healthy enough and could expect problems in meeting its short term obligations.
EL has a Quick ratio (0.97) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.37 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.99% over the past year.
The earnings per share for EL have been decreasing by -13.41% on average. This is quite bad
EL shows a decrease in Revenue. In the last year, the revenue decreased by -2.06%.
EL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.98% yearly.
EPS 1Y (TTM)0.99%
EPS 3Y-26.13%
EPS 5Y-13.41%
EPS Q2Q%-32.99%
Revenue 1Y (TTM)-2.06%
Revenue growth 3Y-1.26%
Revenue growth 5Y0.98%
Sales Q2Q%-9.9%
3.2 Future
EL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.95% yearly.
Based on estimates for the next years, EL will show a small growth in Revenue. The Revenue will grow by 2.45% on average per year.
EPS Next Y-44.61%
EPS Next 2Y-3.14%
EPS Next 3Y6.58%
EPS Next 5Y12.95%
Revenue Next Year-6.82%
Revenue Next 2Y-2.3%
Revenue Next 3Y-0.19%
Revenue Next 5Y2.45%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 28.97, the valuation of EL can be described as expensive.
EL's Price/Earnings is on the same level as the industry average.
EL is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.22, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 24.35, which indicates a rather expensive current valuation of EL.
EL's Price/Forward Earnings ratio is in line with the industry average.
EL's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.86.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.97 | ||
| Fwd PE | 24.35 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EL is valued a bit cheaper than the industry average as 62.86% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, EL is valued a bit cheaper than 62.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.66 | ||
| EV/EBITDA | 11.27 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-3.14%
EPS Next 3Y6.58%
5. Dividend
5.1 Amount
EL has a Yearly Dividend Yield of 2.38%. Purely for dividend investing, there may be better candidates out there.
The stock price of EL dropped by -28.81% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 5.67, EL pays a bit more dividend than its industry peers.
EL's Dividend Yield is comparable with the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.38% |
5.2 History
On average, the dividend of EL grows each year by 9.59%, which is quite nice.
EL has paid a dividend for at least 10 years, which is a reliable track record.
EL has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)9.59%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
EL has negative earnings and hence a negative payout ratio. The dividend may be in danger.
The dividend of EL is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-119.86%
EPS Next 2Y-3.14%
EPS Next 3Y6.58%
59.39
+0.5 (+0.85%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupHousehold & Personal Products
GICS IndustryPersonal Care Products
Earnings (Last)
Earnings (Next)
Inst Owners95.03%
Inst Owner Change-1.56%
Ins Owners0.13%
Ins Owner Change0.11%
Market Cap21.36B
Analysts65.79
Price Target71.2 (19.89%)
Short Float %3.55%
Short Ratio2.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.38% |
Yearly Dividend2.64
Dividend Growth(5Y)9.59%
DP-119.86%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)65.81%
Min EPS beat(2)43.76%
Max EPS beat(2)87.87%
EPS beat(4)4
Avg EPS beat(4)89.87%
Min EPS beat(4)43.76%
Max EPS beat(4)133.75%
EPS beat(8)7
Avg EPS beat(8)106.42%
EPS beat(12)11
Avg EPS beat(12)75.32%
EPS beat(16)15
Avg EPS beat(16)61.99%
Revenue beat(2)0
Avg Revenue beat(2)-2.62%
Min Revenue beat(2)-3.22%
Max Revenue beat(2)-2.01%
Revenue beat(4)0
Avg Revenue beat(4)-2.22%
Min Revenue beat(4)-3.22%
Max Revenue beat(4)-1.43%
Revenue beat(8)1
Avg Revenue beat(8)-1.67%
Revenue beat(12)2
Avg Revenue beat(12)-1.86%
Revenue beat(16)4
Avg Revenue beat(16)-1.7%
PT rev (1m)-6.74%
PT rev (3m)-13.5%
EPS NQ rev (1m)-1.31%
EPS NQ rev (3m)-50.1%
EPS NY rev (1m)0.11%
EPS NY rev (3m)-10.51%
Revenue NQ rev (1m)0.22%
Revenue NQ rev (3m)-4.51%
Revenue NY rev (1m)0.11%
Revenue NY rev (3m)-1.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.97 | ||
| Fwd PE | 24.35 | ||
| P/S | 1.41 | ||
| P/FCF | 18.66 | ||
| P/OCF | 11.8 | ||
| P/B | 5.12 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.27 |
EPS(TTM)2.05
EY3.45%
EPS(NY)2.44
Fwd EY4.11%
FCF(TTM)3.18
FCFY5.36%
OCF(TTM)5.03
OCFY8.47%
SpS42.19
BVpS11.59
TBVpS-5.73
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.54% | ||
| ROE | -16.79% | ||
| ROCE | 10.06% | ||
| ROIC | 6.3% | ||
| ROICexc | 7.64% | ||
| ROICexgc | 15.69% | ||
| OM | 9.76% | ||
| PM (TTM) | N/A | ||
| GM | 73.09% | ||
| FCFM | 7.54% |
ROA(3y)5.84%
ROA(5y)6.89%
ROE(3y)22.7%
ROE(5y)26.57%
ROIC(3y)9.14%
ROIC(5y)9.86%
ROICexc(3y)12.1%
ROICexc(5y)13.99%
ROICexgc(3y)27.91%
ROICexgc(5y)31.23%
ROCE(3y)14.59%
ROCE(5y)15.74%
ROICexcg growth 3Y-21.07%
ROICexcg growth 5Y-22.32%
ROICexc growth 3Y-21.66%
ROICexc growth 5Y-23.4%
OM growth 3Y-18.75%
OM growth 5Y-10.71%
PM growth 3Y-47.93%
PM growth 5Y-26.95%
GM growth 3Y-2.09%
GM growth 5Y-1.48%
F-Score6
Asset Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.75 | ||
| Debt/FCF | 6.36 | ||
| Debt/EBITDA | 3.15 | ||
| Cap/Depr | 79.93% | ||
| Cap/Sales | 4.38% | ||
| Interest Coverage | 4.23 | ||
| Cash Conversion | 78.25% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.37 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | 2.82 |
F-Score6
WACC7.31%
ROIC/WACC0.86
Cap/Depr(3y)232.17%
Cap/Depr(5y)179.27%
Cap/Sales(3y)10.8%
Cap/Sales(5y)8.14%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)0.99%
EPS 3Y-26.13%
EPS 5Y-13.41%
EPS Q2Q%-32.99%
EPS Next Y-44.61%
EPS Next 2Y-3.14%
EPS Next 3Y6.58%
EPS Next 5Y12.95%
Revenue 1Y (TTM)-2.06%
Revenue growth 3Y-1.26%
Revenue growth 5Y0.98%
Sales Q2Q%-9.9%
Revenue Next Year-6.82%
Revenue Next 2Y-2.3%
Revenue Next 3Y-0.19%
Revenue Next 5Y2.45%
EBIT growth 1Y41.99%
EBIT growth 3Y-19.77%
EBIT growth 5Y-9.83%
EBIT Next Year28.58%
EBIT Next 3Y21.14%
EBIT Next 5Y16.56%
FCF growth 1Y21.16%
FCF growth 3Y-21.63%
FCF growth 5Y-4.06%
OCF growth 1Y-6.94%
OCF growth 3Y-13.38%
OCF growth 5Y-1.28%