ESTEE LAUDER COMPANIES-CL A (EL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EL - US5184391044 - Common Stock
116.39 USD
-1.3 (-1.1%)
116.14 USD
-0.25 (-0.21%)
EL gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 36 industry peers in the Personal Care Products industry. EL has a medium profitability rating, but doesn't score so well on its financial health evaluation. EL is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- EL had positive earnings in the past year.
- In the past year EL had a positive cash flow from operations.
- EL had positive earnings in 4 of the past 5 years.
- In the past 5 years EL always reported a positive cash flow from operatings.
1.2 Ratios
- EL's Return On Assets of -4.81% is on the low side compared to the rest of the industry. EL is outperformed by 63.89% of its industry peers.
- With a Return On Equity value of -23.91%, EL is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
- The Return On Invested Capital of EL (6.99%) is better than 66.67% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for EL is below the industry average of 11.85%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -4.81% | ||
| ROE | -23.91% | ||
| ROIC | 6.99% |
ROA(3y)0.13%
ROA(5y)4.98%
ROE(3y)-1.32%
ROE(5y)17.24%
ROIC(3y)7.43%
ROIC(5y)11.04%
1.3 Margins
- EL has a Operating Margin of 8.72%. This is in the better half of the industry: EL outperforms 69.44% of its industry peers.
- In the last couple of years the Operating Margin of EL has declined.
- EL has a Gross Margin of 74.18%. This is amongst the best in the industry. EL outperforms 80.56% of its industry peers.
- EL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.72% | ||
| PM (TTM) | N/A | ||
| GM | 74.18% |
OM growth 3Y-26.29%
OM growth 5Y-11.55%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.76%
GM growth 5Y-0.3%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so EL is destroying value.
- EL has more shares outstanding than it did 1 year ago.
- EL has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for EL is higher compared to a year ago.
2.2 Solvency
- EL has an Altman-Z score of 3.55. This indicates that EL is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of EL (3.55) is better than 63.89% of its industry peers.
- EL has a debt to FCF ratio of 7.01. This is a slightly negative value and a sign of low solvency as EL would need 7.01 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 7.01, EL is in the better half of the industry, outperforming 63.89% of the companies in the same industry.
- EL has a Debt/Equity ratio of 1.88. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 1.88, EL is not doing good in the industry: 72.22% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.88 | ||
| Debt/FCF | 7.01 | ||
| Altman-Z | 3.55 |
ROIC/WACC0.86
WACC8.09%
2.3 Liquidity
- A Current Ratio of 1.32 indicates that EL should not have too much problems paying its short term obligations.
- Looking at the Current ratio, with a value of 1.32, EL is doing worse than 63.89% of the companies in the same industry.
- A Quick Ratio of 0.92 indicates that EL may have some problems paying its short term obligations.
- With a Quick ratio value of 0.92, EL is not doing good in the industry: 61.11% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.32 | ||
| Quick Ratio | 0.92 |
3. Growth
3.1 Past
- The earnings per share for EL have decreased strongly by -36.12% in the last year.
- EL shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -18.22% yearly.
- EL shows a decrease in Revenue. In the last year, the revenue decreased by -6.53%.
- Measured over the past years, EL shows a small growth in Revenue. The Revenue has been growing by 0.04% on average per year.
EPS 1Y (TTM)-36.12%
EPS 3Y-40.77%
EPS 5Y-18.22%
EPS Q2Q%128.57%
Revenue 1Y (TTM)-6.53%
Revenue growth 3Y-6.88%
Revenue growth 5Y0.04%
Sales Q2Q%3.57%
3.2 Future
- Based on estimates for the next years, EL will show a very strong growth in Earnings Per Share. The EPS will grow by 28.74% on average per year.
- The Revenue is expected to grow by 4.05% on average over the next years.
EPS Next Y47.51%
EPS Next 2Y43.12%
EPS Next 3Y36.88%
EPS Next 5Y28.74%
Revenue Next Year4.25%
Revenue Next 2Y4.13%
Revenue Next 3Y4.3%
Revenue Next 5Y4.05%
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.
- 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
- EL is valuated quite expensively with a Price/Earnings ratio of 69.28.
- EL's Price/Earnings ratio is in line with the industry average.
- EL is valuated expensively when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 37.88, the valuation of EL can be described as expensive.
- The rest of the industry has a similar Price/Forward Earnings ratio as EL.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. EL is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 69.28 | ||
| Fwd PE | 37.88 |
4.2 Price Multiples
- EL's Enterprise Value to EBITDA is on the same level as the industry average.
- EL's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.14 | ||
| EV/EBITDA | 22.83 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- EL's earnings are expected to grow with 36.88% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.46
PEG (5Y)N/A
EPS Next 2Y43.12%
EPS Next 3Y36.88%
5. Dividend
5.1 Amount
- EL has a Yearly Dividend Yield of 1.17%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 1.90, EL pays a bit more dividend than its industry peers.
- EL's Dividend Yield is slightly below the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.17% |
5.2 History
- The dividend of EL has a limited annual growth rate of 4.31%.
- EL has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)4.31%
Div Incr Years0
Div Non Decr Years0
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-54.3%
EPS Next 2Y43.12%
EPS Next 3Y36.88%
ESTEE LAUDER COMPANIES-CL A / EL FAQ
What is the ChartMill fundamental rating of ESTEE LAUDER COMPANIES-CL A (EL) stock?
ChartMill assigns a fundamental rating of 3 / 10 to EL.
What is the valuation status for EL stock?
ChartMill assigns a valuation rating of 2 / 10 to ESTEE LAUDER COMPANIES-CL A (EL). This can be considered as Overvalued.
What is the profitability of EL stock?
ESTEE LAUDER COMPANIES-CL A (EL) has a profitability rating of 4 / 10.
What is the valuation of ESTEE LAUDER COMPANIES-CL A based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ESTEE LAUDER COMPANIES-CL A (EL) is 69.28 and the Price/Book (PB) ratio is 10.78.
Can you provide the dividend sustainability for EL stock?
The dividend rating of ESTEE LAUDER COMPANIES-CL A (EL) is 4 / 10 and the dividend payout ratio is -54.3%.