Estee Lauder setting up for a long term rally? (March 5, 2025)A lot of interesting signals developing on NYSE:EL higher timeframe charts here
EL trade ideas
EL - Estee Lauder Cos: Is the end of the capitulation?up +5%.
I am buying right now, right here after this bounce of +5%.
no more than 5% to 7% of my portfolio.
I know that the stock has been completely decimated, they have high levels of debt, their profit margins have decreased from 6.9% to 4.2%, insiders have recently sold, and the dividend is not well-covered by the cash flow.
However, I have confidence in this technical rebound before the earnings announcement in 6 days.
Wish me luck, and I hope the dividend will cover the potential losses, lol.
Estee Lauder | EL | Long at $67.33Reentering Estee Lauder at $67.33 due to the persistence of the Director, Paul Fribourg, buying around $33,000,000 worth of shares between $63-$66 (even after the earnings debacle). While the company had a horrendous outlook for FY2025, the bad news may be already priced in (i.e. cutting 7,000 jobs, weak sales, etc.). A "profit recovery and growth plan" is underway, so buckle up for the high risk of further declines in stock price in the near-term. Personally, a buy and hold at $67.33 with the primary thesis being global expansion (recovering Chinese market) or potential buyout into 2027.
Targets
$80.00
$86.00
Stock Of The Day / 02.04.25 / EL02.04.2025 / NYSE:EL #EL
Fundamentals. Earnings report. Estee Lauder beats earnings expectations, but negative forecasts send shares lower.
Technical analysis.
Daily chart: Downtrend. Level 69.78 formed by the gap in November 2024 is ahead.
Premarket: Gap Down on increased volume.
Trading session: A pullback after the initial downward movement was stopped at the level of 74.00. We observe a narrow range and a clear holding of the price below the level. We are considering a short trade to continue the downward movement in case of holding the level of 74.00.
Trading scenario: #Pullback along the trend (#rebound) from the level 74.00
Entry: 73.13 when exit down from the trading range below the level.
Stop: 74.12 we hide it behind the level with a small reserve.
Exit: Close part of the position before the daily level of 69.78. Close the remaining part of the position at a price of 68.50 when the structure of the downtrend is broken.
Risk Rewards: 1/4
P.S. In order to understand the idea behind the Stock Of The Day analysis, read the following information .
Estee Lauder | EL | Long at $63.00On November 13th, 2024, the Director of Estee Lauder NYSE:EL purchased $10,000,000+ worth of shares. From a technical analysis perspective, this makes sense as it almost double entered my "crash" simple move average lines (indicated in gray). On the rare occasion the price double dips these areas, odds are typically in my favor a rally may be ahead (obviously, without unforeseen bad news from the company). While it still may dip into the "crash" simple moving average lines ( GETTEX:50S ), I believe the "Santa Claus" rally is around the corner and we may be close to a near-term bottom for $NYSE:EL. However, this is a very risky play due to the fundamentals of the company - which currently aren't good. But future prospects from NYSE:EL may change the momentum. Thus, at $63.00, NYSE:EL is in my personal buy zone.
Target #1 - $86.00
Target #2 - $100.00
Target #3 - $120.00
weekly time frame promising for ELLooking at the weekly time frame for EL, I see great potential for an upward trend. Very strong support at 61.00 so would stop loss there and enjoy and upward trend to 115 to 120, I expect that by April or May this year. long term profits! long time frames, and forget the rest.
Estee Lauder (Extended Hours) | Chart & Forecast SummaryKey Indicators On Trade Set Up In General
1. Push Set Up
2. Range Set up
3. Break & Retest Set Up
Notes On Session
# Estee Lauder (Extended Hours)
- Double Formation
* Retracement | Not Numbered | Subdivision 1
* ABC Flat Correction
- Triple Formation
* 118.20 USD | Wave 2 | Extension | Subdivision 2
* Retracement | Numered | 1))
* Cup & Handle Pattern | Daily Time Frame | Subdivision 3
Active Sessions On Relevant Range & Elemented Probabilities;
London(Upwards) - NYC(Downwards)
Conclusion | Trade Plan Execution & Risk Management On Demand;
Overall Consensus | Neutral
The second biggest beauty queen: Estée LauderIntro
Estée Lauder, the second-largest global cosmetics company, has experienced over 80% drop in share price from its peak, an unexpected downturn for a traditionally resilient stock in the beauty sector. Additionally, I will examine two major competitors, Coty and L'Oréal, to better understand Estée Lauder’s current position within the industry. While Estée Lauder remains a strong brand with a high market profile, its valuation challenges, dependence on recovering markets, and competitive threats may make Coty and L'Oréal viable alternatives for investors looking for stability or better value propositions.
Company Overview
History and Market Position:
Founded in 1946, Estée Lauder has built a robust, globally recognized portfolio including Estée Lauder, Clinique, Tom Ford, Jo Malone, La Mer, and other high-end brands. The company offers a range of beauty products, including skincare, makeup, fragrance, and haircare. Estée Lauder operates through various sales channels worldwide, including department stores, specialty shops, beauty salons, spas, and authorized e-commerce platforms. Notably, the company generates approximately 30% of its sales online, reflecting a successful adaptation to digital retail trends for a nearly century-old brand.
Geographical Reach:
Estée Lauder’s primary markets are Europe (Europe, Middle East and Africa: 39%), Asia (Asia/Pacific: 33%), and the U.S (The Americas: 28%), with Europe being the most important, closely followed by Asia. Skincare products, in particular, serve as a key revenue driver, demonstrating the brand’s strength in high-value beauty categories.
Family-Run Philosophy and Performance:
As a family-run corporation, Estée Lauder emphasizes long-term and sustainable growth. Family-owned businesses have outperformed employee-led firms over the past two decades, an encouraging trend for investors who prioritize stability. Even though Estée Lauder has had a poor performance over last months, Family owned businesses perform better than non-family owned (Credit Suisse Research).
Market Challenges and Recent Decline
Share Price Decline:
Estée Lauder’s share price decline has been significant, with over 80% drop from its peak. This surprising performance is primarily attributed to economic difficulties in China, a key market for Estée Lauder. The company is heavily affected by reduced travel activity and weak domestic demand in China, especially following Covid-19, as its high-end products often see strong sales in airport and travel retail environments. There was also a big uprise of the stock price due to the recovering phase of Covid-19. People were able to get out and enjoy recreational activities again.
Competitive Pressures:
The beauty market has seen heightened competition and lower barriers to entry. Even in the prestige sector, Estée Lauder faces challenges from new entrants, particularly influencer-backed brands that resonate with younger consumers. Social media influencers, such as Kylie Jenner, have successfully built high-profile brands that leverage direct community engagement, which has diverted consumer attention from traditional brands. In 2019, Jenner sold a 51% stake in Kylie Cosmetics to Coty, underscoring the appeal of influencer-driven brands in today’s market. Not to mention its biggest competitor L’Oréal. The brand insulation that Estée Lauder once enjoyed, is making it harder for the company to defend its market share as effectively as it did in previous decades.
Financial Overview and Valuation
Current Valuation Metrics:
• Share Price: Trading around $64
• Fair Value Estimate: ~$187 (reflecting significant potential upside)
Estée Lauder’s P/E ratio (Current 112x) is very high but its still a strong brand. The current valuation levels mirror those of the 2008–2009 financial crisis, signaling possible downside risk.
Growth and Margin Targets:
• Revenue growth target: 6–8%, which exceeds inflation and provides a stable growth outlook.
• Profit growth target: Double-digit profit growth, with a focus on luxury products.
• Operating margin target: Annual increase of 50 basis points.
Estée Lauder’s long-term strategy aims to exceed market growth by 1% annually in prestige beauty. Although attractive, the current valuation combined with low revenue growth and modest profit projections, may pose risks, particularly with 5% risk-free rates available in the market.
Competitor Analysis
1. Coty
• Valuation: P/E of 14x, significantly below Estée Lauder.
• Product Portfolio: Coty’s brand portfolio includes Burberry, Calvin Klein, Chloé, Gucci, and Tiffany, among others. Coty is less reliant on the Asia-Pacific market (only 11% of revenue), reducing its exposure to economic fluctuations in the region.
• Financial Health: Coty’s recent focus on reducing debt has brought leverage from 6.8x in 2021 to 3.3x in 2024. Additionally, Coty has struggled with high debt due to an acquisition-heavy strategy. Recently, Coty hired a new CEO from L’Oréal, potentially signaling a turnaround.
• Market Position: Despite its lower quality compared to Estée Lauder, Coty’s valuation and reduced exposure to China make it an interesting, though riskier, alternative.
2. L’Oréal
• Valuation: Trading at 30x earnings, in line with Estée Lauder’s.
• Margins: Excellent financials, with a 75% gross margin, 20% operating margin, and 15% net margin.
• Growth Stability: L’Oréal has grown its market share over the years, maintaining a stable valuation. With a fair value projection of around 27x earnings, L’Oréal appears fairly valued in the current market environment.
Conclusion and Outlook
Estée Lauder, though a premier player in the luxury beauty industry, faces valuation challenges given its high premium relative to current and projected growth. High valuation levels at a time when risk-free rates are 5% create added pressure for the company to achieve strong returns, a challenging feat amid economic headwinds in core markets.
While Coty’s lower valuation makes it an appealing choice for value-focused investors, its past management missteps and reliance on debt-financed growth carry risk. Nevertheless, Coty’s reduced China exposure and recent restructuring make it worth watching for those seeking a higher-risk, higher-reward alternative. L’Oréal, meanwhile, offers a more balanced approach with strong margins and stable growth potential, supported by fair valuation metrics.
Time to AccumalteI shorted Estee Lauder and closed my short today at $73. We have just hit support at $65 at an important Monthly level of support.
Time for me to accumulate a long position with the proceeds of my short.
Not financial advice, do what's best for you. Refer to my previous trades on this stock to see why I think the final capitulation wave is in.
Estee Lauder’s 26% Plunge: Revenue Miss & All Short Targets Hit!Estee Lauder (EL) Stock Analysis:
Estee Lauder (EL) saw a dramatic 26% drop, marking a significant bearish turn as all short trade targets on the 15-minute timeframe were swiftly reached. The chart reflects intense selling pressure, with shares plummeting after disappointing earnings and cautious guidance.
Key Trade Details:
Entry Level: 88.29
Target Levels:
TP1: 87.89
TP2: 87.29
TP3: 86.58
TP4: 86.17
Stop Loss: 88.62
Key Market Insights:
Revenue Miss and Guidance Withdrawal: Estee Lauder missed revenue expectations, reporting a 4% YoY decline, and pulled its fiscal 2025 outlook, signaling incremental uncertainty in the Chinese market and Asia’s travel retail sector. The company now plans to provide only quarterly guidance.
Challenges in China and Travel Retail: Weak consumer sentiment in China and reduced demand in Asia travel retail, including low conversion rates in Hong Kong, led to a 5% drop in organic net sales, impacting overall performance.
Summary:
Estee Lauder’s sharp decline capitalized on bearish momentum, achieving all short trade targets quickly. The disappointing earnings, along with withdrawn guidance, underscore the headwinds Estee Lauder faces in a slowing global economy, particularly in Asia. This setup demonstrates the high-risk, high-reward potential for short-term trades in volatile stocks.
Final wave of a giant falling knifeEstée Lauder looks very bearish. It’s lost the $100 key psychological level. Now we appear to be in the final 5th wave. We could easily drop another 20% here. It wouldn’t be a bad place to start a dca plan if you like the name. Personally I’m not looking to catch the falling knife and will keep my short position from $140. I’ll close out of it if we manage to reclaim $100.
Downside target would be somewhere between $75-80. Not financial advice
Catching a Falling Knife TradeTechnical:
A classic 5 wave pattern down, a large head and shoulders pattern confirmed the massive drop. Price is now stabilizing, we could be in the final stages of Wave 5.
Each wave down was a short trade at the 0.5 and 0.618 Fib retracement. It's been a brutal 76% crash since the top.
I would like to see a change in market structure as this has been a falling knife and whilst this is going sideways the buying pressure needs to step in. I am therefore watching the earnings and charts closely on this before taking a long position.
Fundamentals:
Strong Brand Portfolio and Global Presence: Estee Lauder owns a diversified portfolio of premium brands, including MAC, Clinique, and La Mer, which have strong recognition and customer loyalty globally. Its presence in high-growth regions, like Asia-Pacific, gives it a robust international foothold to leverage in emerging markets and adapt to shifting demographics and beauty trends.
Focus on Digital Transformation: The company has been investing in digital channels, e-commerce, and data-driven personalization, allowing it to cater directly to consumers with personalized products and marketing strategies. This shift has enabled them to capture a growing share of online beauty sales, which is expected to continue expanding post-pandemic.
Exposure to Slowing Luxury Demand: As a luxury brand, Estee Lauder is vulnerable to economic downturns, particularly in the U.S. and Europe. If global economies slow further, discretionary spending on high-end cosmetics could drop, affecting sales and profitability in key markets.
Supply Chain and Cost Pressures: Rising costs for raw materials and logistics have impacted Estee Lauder’s operating margins, and the ongoing cost inflation could continue to affect profit margins. Persistent supply chain disruptions also pose risks to product availability and lead times, potentially impacting customer satisfaction and revenue growth.
Conclusion:
This mix of positives and challenges could position Estee Lauder well for long-term growth but requires navigating through some short-term pressures.
$EL - Starting to form a baseNYSE:EL is starting to form a base inside a channel. It is currently sitting on the POC (Point of Control) support area.
The ideal area to take a position is around $80 to $74 area. 👀
As always, I share my opinions and trades. I'm not suggesting that anyone follow my trades. You do you.
EL | This is Ready for a Move Higher | LONGThe Estee Lauder Companies, Inc. engages in the manufacture of skin care, makeup, fragrance and hair care products. It sells products under Estee Lauder, Clinique, Origins, MAC, Bobbi Brown, La Mer, Jo Malone London, Aveda and Too Faced. Its channels consist of department stores, multi-brand retailers, upscale perfumeries and pharmacies, and prestige salons and spas. The company was founded by Estee Lauder and Joseph Lauder in 1946 and is headquartered in New York, NY.
EL Estee Lauder Price has been dropping like a tank for the past 2 years. This is a big company and I believe their earnings on Monday is going to push the stock back up to at least $125. Get in before market open. Every analysis I posted has gone straight into profits. Lets keep the wins going. NYSE:EL
