ESTEE LAUDER COMPANIES-CL A (EL)

US5184391044 - Common Stock

148.67  +1.19 (+0.81%)

After market: 149 +0.33 (+0.22%)

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to EL. EL was compared to 38 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 quite expensive at the moment. It does show a decent growth rate.



5

1. Profitability

1.1 Basic Checks

In the past year EL was profitable.
In the past year EL had a positive cash flow from operations.
In the past 5 years EL has always been profitable.
In the past 5 years EL always reported a positive cash flow from operatings.

1.2 Ratios

EL has a Return On Assets of 2.01%. This is comparable to the rest of the industry: EL outperforms 54.05% of its industry peers.
EL has a better Return On Equity (8.18%) than 70.27% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.73%, EL is in line with its industry, outperforming 56.76% of the companies in the same industry.
EL had an Average Return On Invested Capital over the past 3 years of 13.18%. This is in line with the industry average of 14.94%.
The last Return On Invested Capital (4.73%) for EL is well below the 3 year average (13.18%), which needs to be investigated, but indicates that EL had better years and this may not be a problem.
Industry RankSector Rank
ROA 2.01%
ROE 8.18%
ROIC 4.73%
ROA(3y)9.6%
ROA(5y)9.24%
ROE(3y)36.05%
ROE(5y)33.25%
ROIC(3y)13.18%
ROIC(5y)15.1%

1.3 Margins

EL has a Profit Margin of 3.08%. This is in the better half of the industry: EL outperforms 62.16% of its industry peers.
In the last couple of years the Profit Margin of EL has declined.
The Operating Margin of EL (6.87%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of EL has declined.
Looking at the Gross Margin, with a value of 70.08%, EL is in the better half of the industry, outperforming 78.38% of the companies in the same industry.
EL's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 6.87%
PM (TTM) 3.08%
GM 70.08%
OM growth 3Y-8.55%
OM growth 5Y-7.55%
PM growth 3Y9.67%
PM growth 5Y-4.86%
GM growth 3Y-1.7%
GM growth 5Y-2.06%

3

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 about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for EL has been reduced compared to 5 years ago.
Compared to 1 year ago, EL has a worse debt to assets ratio.

2.2 Solvency

EL has an Altman-Z score of 3.56. This indicates that EL is financially healthy and has little risk of bankruptcy at the moment.
EL has a Altman-Z score of 3.56. This is in the better half of the industry: EL outperforms 72.97% of its industry peers.
A Debt/Equity ratio of 1.16 is on the high side and indicates that EL has dependencies on debt financing.
EL has a worse Debt to Equity ratio (1.16) than 75.68% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.16
Debt/FCF N/A
Altman-Z 3.56
ROIC/WACC0.57
WACC8.25%

2.3 Liquidity

A Current Ratio of 1.36 indicates that EL should not have too much problems paying its short term obligations.
With a Current ratio value of 1.36, EL is not doing good in the industry: 62.16% of the companies in the same industry are doing better.
EL has a Quick Ratio of 1.36. 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 (0.96) which is in line with its industry peers.
Industry RankSector Rank
Current Ratio 1.36
Quick Ratio 0.96

4

3. Growth

3.1 Past

EL shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -70.75%.
The Earnings Per Share has been decreasing by -5.22% on average over the past years.
Looking at the last year, EL shows a decrease in Revenue. The Revenue has decreased by -7.23% in the last year.
Measured over the past years, EL shows a small growth in Revenue. The Revenue has been growing by 3.10% on average per year.
EPS 1Y (TTM)-70.75%
EPS 3Y-5.59%
EPS 5Y-5.22%
EPS growth Q2Q-42.86%
Revenue 1Y (TTM)-7.23%
Revenue growth 3Y3.69%
Revenue growth 5Y3.1%
Revenue growth Q2Q-7.38%

3.2 Future

The Earnings Per Share is expected to grow by 16.79% on average over the next years. This is quite good.
EL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.61% yearly.
EPS Next Y-30.46%
EPS Next 2Y11.18%
EPS Next 3Y16.58%
EPS Next 5Y16.79%
Revenue Next Year-0.96%
Revenue Next 2Y3.76%
Revenue Next 3Y4.9%
Revenue Next 5Y5.61%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

1

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 97.17, which means the current valuation is very expensive for EL.
EL's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of EL to the average of the S&P500 Index (26.32), we can say EL is valued expensively.
Based on the Price/Forward Earnings ratio of 34.86, the valuation of EL can be described as expensive.
EL's Price/Forward Earnings is on the same level as the industry average.
EL is valuated expensively when we compare the Price/Forward Earnings ratio to 21.63, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 97.17
Fwd PE 34.86

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as EL.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 31.08

4.3 Compensation for Growth

EL's earnings are expected to grow with 16.58% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y11.18%
EPS Next 3Y16.58%

5

5. Dividend

5.1 Amount

EL has a Yearly Dividend Yield of 1.82%. Purely for dividend investing, there may be better candidates out there.
EL's Dividend Yield is a higher than the industry average which is at 4.45.
Compared to the average S&P500 Dividend Yield of 2.48, EL is paying slightly less dividend.
Industry RankSector Rank
Dividend Yield 1.82%

5.2 History

The dividend of EL is nicely growing with an annual growth rate of 11.74%!
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)11.74%
Div Incr Years3
Div Non Decr Years3

5.3 Sustainability

203.00% of the earnings are spent on dividend by EL. This is not a sustainable payout ratio.
The dividend of EL is growing, but earnings are growing more, so the dividend growth is sustainable.
DP203%
EPS Next 2Y11.18%
EPS Next 3Y16.58%

ESTEE LAUDER COMPANIES-CL A

NYSE:EL (2/22/2024, 7:04:00 PM)

After market: 149 +0.33 (+0.22%)

148.67

+1.19 (+0.81%)

Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupHousehold & Personal Products
GICS IndustryPersonal Care Products
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap53.29B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 1.82%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 97.17
Fwd PE 34.86
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 2.01%
ROE 8.18%
ROCE
ROIC
ROICexc
ROICexgc
OM 6.87%
PM (TTM) 3.08%
GM 70.08%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.65
Health
Industry RankSector Rank
Debt/Equity 1.16
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.36
Quick Ratio 0.96
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-70.75%
EPS 3Y-5.59%
EPS 5Y
EPS growth Q2Q
EPS Next Y-30.46%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-7.23%
Revenue growth 3Y3.69%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y