Estee Lauder (EL)
Consumer Staples · $41.0B market cap · SEC CIK 0001001250
ahead of 13% of the S&P 500 · #29 of 36 in Consumer Staples
Next reports on Feb 3, 2027, with analysts expecting $1.26 in earnings per share.
52-week range $66.22 to $121.64. 7% below its 52-week high and 71% above its low.
The case for EL
- Earnings per share up 391.8%.
- Gross margin of 76% absorbs cost shocks.
- Pays a modest 2.1% dividend.
The case against
- Expensive for its growth: 111.4× earnings, where 0% a year of growth plus a 2.1% dividend would justify about 11×.
- Revenue has shrunk 1.5% a year over five years.
- Net margin of 2.4% leaves very little room for error.
- Stability is weak (27/100): beta 1.19, 3.8 years of cash flow to clear its debt, a 46% swing over the year.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Consumer Staples companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 7 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 42 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 44 |
| Momentumhow the price has behaved lately | 84 |
| Stabilityhow violently it moves, what it owes and what it pays you | 27 |
- Each factor except momentum is half fixed thresholds, half rank among the 36 Consumer Staples companies.
The financials
Revenue growth
Is the business growing? Slowly
| Last 12 months | +5.8% |
|---|---|
| Over 5 years | −1.5% a year |
| FY2026 revenue | $15.0B (+5%) |
Free cash flow
Is it generating real cash? Yes
| FY2026 free cash flow | $1.3B |
|---|---|
| Of revenue | 9% |
| Of profit | 723% |
Profit margins
Is profitability improving? Yes, improving
| Gross margin | 76% |
|---|---|
| Operating margin | 7% |
| Net margin, FY25 → FY26 → now | −7.9% → 1.2% → 2.4% |
Debt vs. cash
Is the balance sheet healthy? Mostly, with some debt to carry
| Cash | $3.5B |
|---|---|
| Long-term debt | $6.8B |
| Net debt | $3.3B |
| Years to repay | 3.8 yrs |
Valuation
Is the stock price reasonable? No, expensive
| P/E | 111.4× |
|---|---|
| Fair P/E for its growth | 11× |
| P/FCF | 31.2× |
| Forward P/E | 30.8× |
| EV / EBITDA | 24.9× |
At 111.4× earnings it trades well above the 11× that 0% a year of growth plus a 2.1% dividend would justify. At 31.2× free cash flow it trades well above that same mark.
The financials, five years deep
Pulled from Estee Lauder's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2026 | FY2025 | FY2024 | FY2023 | FY2022 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $15.0B | $14.3B | $15.6B | $15.9B | $17.7B |
| Change on the year | +5% | −8% | −2% | −10% | — |
| Free cash flow | |||||
| Free cash flow | $1.3B | $670M | $1.4B | $728M | $2.0B |
| Of revenue | 9% | 5% | 9% | 5% | 11% |
| Profit margins | |||||
| Gross margin | 75.5% | 74.0% | 71.7% | 71.3% | 75.7% |
| Operating margin | 5.2% | −5.5% | 6.2% | 9.5% | 17.9% |
| Net margin | 1.2% | −7.9% | 2.6% | 6.3% | 13.6% |
| Debt vs. cash | |||||
| Cash | $3.5B | $2.9B | $3.4B | $4.0B | $4.0B |
| Long-term debt | $6.8B | $7.3B | $7.3B | $7.1B | $5.1B |
| Net cash (debt) | −$3.3B | −$4.4B | −$3.9B | −$3.1B | −$1.2B |
What Estee Lauder says it does
The Estée Lauder Companies Inc., founded in 1946 by Estée and Joseph Lauder, is one of the world’s leading manufacturers, marketers and sellers of quality skin care, makeup, fragrance and hair care products. We are a steward of over 20 luxury and prestige brands globally. Since the initial launch of the Estée Lauder brand in the United States, we have significantly expanded our consumer reach to approximately 150 countries and territories. We operate as a wholesaler, with our products sold in brick-and-mortar locations and on various e-commerce platforms, including those operated by department stores, duty-free retailers, specialty-multi retailers, online pure players, upscale perfumeries and pharmacies, and top-tier salons and spas. Additionally, we operate a direct-to-consumer business across freestanding stores, our brands' websites and third-party online platforms. In February 2025, we embarked on “Beauty Reimagined,” a strategic…
Risk factors EL lists in its 10-K
- The beauty business is highly competitive, and if we are unable to compete effectively our business will suffer
- Our inability to anticipate and respond to market trends and changes in consumer preferences could adversely affect our business
- Our future success depends, in part, on our ability to achieve our long-term strategy
- Acquisitions, divestitures and other strategic actions may expose us to additional risks
- Our business could be negatively impacted by social impact and sustainability matters
- We use AI, and challenges with properly managing its use could have an adverse impact on our business
- A general economic downturn, or disruption in business conditions may adversely affect our business including consumer purchases of discretionary items and/or the financial strength of our customers that are retailers
- Our success depends, in part, on the quality, efficacy and safety of our products
- Our success depends, in part, on our key personnel
- We are subject to risks related to the global scope of our operations
- A disruption in our operations, including supply chain, could adversely affect our business
- As we outsource functions and consolidate service providers, we become more dependent on the entities performing those functions and services
- Changes in laws, regulations and policies could adversely affect our business
- Disputes and other legal or regulatory proceedings could adversely affect our business
- Government reviews, inquiries, investigations and actions could harm our business
- The trading prices of our securities periodically may rise or fall based on the accuracy of predictions of our financial performance
- We are controlled by the Lauder family. As a result, the Lauder family has the ability to prevent or cause a change in control or approve, prevent or influence certain actions by us