Estee Lauder Companies Inc (EL) stock analysis

P/E above its 5-year median

Estee Lauder Companies's P/E of 112.3 is above its own 5-year median of 58.8.

P/E above the industry

Estee Lauder Companies's P/E of 112.3 is above the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median of 29.9.

EV/EBITDA below its 5-year median

Estee Lauder Companies's EV/EBITDA of 24.5 is below its 5-year median of 27.4.

P/B above the industry

Estee Lauder Companies's price-to-book of 10.06 is above the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median of 4.86.

Trading above fair value

The share price of $112.33 is above our fair value estimate of $66.49.

Margin of safety under 20%

The price is 68.9% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -1.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -43.6% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 5.8% over the last twelve months; the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median is 5.9%.

Guidance raised

Estee Lauder Companies raised its fiscal 2027 full-year Adjusted operating margin outlook on Aug 19, 2026.

Gross margin improving

Gross margin was 76.0% over the last twelve months, against 74.2% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on capital under 10%

Return on invested capital was 6.1%, below the 10% that usually covers the cost of capital.

Return on equity against the industry

Needs positive equity.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin against its history

Needs five years of revenue and net income.

Net margin against the industry

Needs revenue and net income.

High debt

Debt is 167% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 91.9% five years ago to 167%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 28.9% of total debt.

Interest not well covered

Operating income covers interest expense 3.1 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.25 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.36; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Estee Lauder Companies paid dividends worth 1.2% of the share price over the last twelve months.

Yield below Treasuries

The 1.2% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Estee Lauder Companies yields 1.2%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Covered by free cash flow

Dividends take 33.4% of free cash flow.