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ESTEE LAUDER COS

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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.
NYSE:ELLong
by marc_kober
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.
NYSE:EL
by NoFOMO_
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.
NYSE:ELShort
by ProfitsNinja
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
NYSE:ELShort
by NoFOMO_
2
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.
NYSE:ELLong
by DivergenceSeeker
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.
NYSE:ELLong
by Maximus20000
$EL | Allocation | Market Exec | Technical Confluences: - Fibonacci retracement since the beginning of NYSE:EL 's history, puts the price action at the 78% retracement level - It coincides with a Demand Zone as can be seen across the price history - Stochastics are in Oversold conditions from Monthly, Weekly, Daily, H4 and even H1 - Will likely put Buy Stop levels at the Interest Zone areas to target a move to the 50% Fibo Retracement of this drastic bear move Fundamental Confluences: - Deep discount on a well-renowned brand - Earnings does not look too good at the moment but they do own some global brands names in beauty care - Growth can be weak now, but do you see people stop putting on cosmetics and ignore their appearances when they go out? If no, this share is definitely worth a try ________________________________ Putting in 2 portions of my NYSE:EL allocation now with more orders to be placed on in the future Long-Term value hold in my portfolio. Remember, DYOR. ________________________________ Boosts 🚀, Follows ✌️, Shares 🙌 & Comments ✍️ are much appreciated! If you have any ideas or charts, do share them in the 'Comments' section below and we can discuss our perspectives to improve or strengthen our strategies. If you want something analyzed, do drop me a DM. :D ________________________________ Disclaimer: The above suggestion is an personal opinion in general and does not constitute as investment advice. Any decisions taken based on the above suggestion is purely your own risks. DYOR.
NYSE:ELLong
by weekendanalyst
Is it time to accumulate EL ?EL has fallen more than 60% from its peak in Dec 2021. It's latest financial figures reveal a reduction in revenue and profitability. As a market leader in the personal care industry, it is also facing more and more small independent brands that continue to erode its market shares. The chart shows it has reached a critical support level at 153.20 but I think it is likely to revisit the next support level at 126.23. Let's see how it goes in a few months time.
NYSE:EL
by dchua1969
RiskMastery's Red Flag Stocks - EL EditionWelcome to RiskMastery's Red Flag Stocks - Stocks with bearish potential. In this edition, we'll be looking at NYSE:EL ... I believe this code is at a point of potential volatility. If price can hold below $144.43 ... Bearish potential may be unlocked. My key downside targets include: - $133.30 (Conservative) - $110.11 (Medium) - $95.00 (Aggressive) If however price breaks above $158.19 ... Bullish potential may be unlocked. (My key risk targets - C, M,& A - are as noted on the chart) Enjoy, and I look forward to being of further service into the future. If you'd like to connect, feel free to reach out and comment below. Mr RM | Risk Mastery Disclaimer: This post is intended for educational purposes only - Publicly available RiskMastery information & content is not intended to be financial advice in any shape or form. Please do your own research and seek advice from a licensed professional before acting on any of the information contained within this post. This post is not a solicitation or recommendation to buy, sell or hold any positions in any financial instrument. All demonstrated trades are merely incidental to the educational training RiskMastery aims to provide. You are solely responsible for your own investment and trading decisions, of which should be made only according to your own opinion, knowledge and experience. You should not rely on any of the information contained on this site or contained in any RiskMastery material on any website or platform. You assume the sole risk of any trade or investment you elect to make. RiskMastery and affiliates shall not be liable to you for any monetary losses or any other damages incurred directly or indirectly, from your use, reliance or reference of RiskMastery materials, content and educational information. Thank you for your understanding and cooperation - We look forward to working with you into the future to navigate the fine line of trading and investment success.
NYSE:ELShort
by RiskMasteryOfficial
Estée Lauder Surges 6.6% on Analyst UpgradeEstée Lauder (NYSE:EL) is making waves with a significant 6.6% surge following an analyst upgrade from Bank of America. The upgrade, from Neutral to Buy, accompanied by a raised price target, underscores renewed optimism in the beauty giant's future prospects. Bank of America's bullish stance hinges on Estée Lauder's ( NYSE:EL ) strategic pivot towards product innovation and market expansion. The analyst highlights Estée Lauder's recent initiatives, including the rollout of new derma lines, intensified marketing efforts for flagship brands like Clinique and Estée Lauder, rejuvenation of makeup stalwarts MAC and Bobbi Brown, and a targeted marketing push for high-end brands such as LeMer. These strategic maneuvers, coupled with restructuring efforts and supply chain optimizations, position Estée Lauder for robust earnings growth. The analyst predicts a potential earnings per share (EPS) of $6 by fiscal year 2026, buoyed by anticipated sales leverage and operational efficiencies, even in the face of modest growth projections in key markets like China. But is now the opportune moment to add Estée Lauder to your investment portfolio? The market's response to today's news suggests a resounding yes. Despite its historically subdued volatility, Estée Lauder's sharp uptick indicates the market's recognition of the significance of this upgrade. While this boost may not fundamentally alter perceptions overnight, it underscores growing confidence in Estée Lauder's trajectory. Reflecting on Estée Lauder's recent performance offers a nuanced perspective. The company's earnings report paints a mixed picture, with a notable beat on second-quarter expectations offset by a shortfall in earnings forecasts for the upcoming quarter and full year. However, amidst these fluctuations, Estée Lauder remains steadfast in its commitment to a top-line recovery, projecting a return to double-digit organic net sales growth in the latter half of fiscal 2024. Moreover, Estée Lauder's proactive measures, including a restructuring plan aimed at enhancing profitability, instill optimism in its long-term resilience. While the stock may currently trade below its 52-week high, its upward trajectory since the beginning of the year signals momentum building within the company. For investors eyeing Estée Lauder, the journey over the past five years serves as a testament to its enduring value. Despite recent fluctuations, the stock has maintained its allure, offering a compelling opportunity for long-term growth. In conclusion, Estée Lauder's surge on the back of an analyst upgrade underscores its potential as a lucrative investment opportunity. With strategic initiatives poised to drive earnings growth and market expansion, Estée Lauder presents a compelling proposition for investors seeking exposure to the dynamic beauty industry. As the company continues to innovate and adapt, now may indeed be the time to add a touch of Estée Lauder to your investment palette.
NYSE:ELLong
by DEXWireNews
EL jumps on analyst upgrade LONGEL like ULTA was beaten down in covid times. It jumped in 2021 and fell in 2022 and 2023. 2024 might be the year they thrive again. On the weekly chart, EL is back to the support of its levels of 2018. With an analyst upgrade coming from Bank of America it is now getting a bit of attention. Trend strength and relative strength were down. I see this as a good entry for a new long position in EL while also looking at ULTA. Targets are the fib zone and a correction / consolidation area on the downtrend so 200 and 250. Now is the time to invest in female beauty.....
NYSE:EL
by AwesomeAvani