The Estée Lauder Companies Inc. (EL), headquartered in New York, manufactures, markets, and sells skin care, makeup, fragrance, and hair care products. Valued at $37.6 billion by market cap, the company's products are sold through department stores, mass retailers, company-owned retail stores, hair salons, and travel-related establishments.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and EL perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the household & personal products industry. EL's strength lies in its diversified portfolio of iconic brands like La Mer, driving premium pricing and loyalty. Its global reach and omnichannel distribution network provide a competitive edge, enabling access to diverse markets and mitigating regional risks.
Despite its notable strength, EL slipped 16.4% from its 52-week high of $121.64, achieved on Feb. 3. Over the past three months, EL stock has gained 20.1%, outperforming the State Street Consumer Staples Select Sector SPDR ETF’s (XLP) 1.1% gains during the same time frame.
Shares of EL fell 2.9% on a YTD basis, underperforming XLP’s YTD 8.2% gains. However, the stock climbed 14.5% over the past 52 weeks, outperforming XLP’s 4.3% returns over the last year.
To confirm the bullish trend, EL has been trading above its 200-day moving average since mid-August. The stock has been trading above its 50-day moving average since early May, with slight fluctuations.
EL's outperformance was driven by broad-based organic growth in Skin Care and Fragrance, with 23% of sales from new launches, plus margin expansion from its PRGP restructuring. The company gained share for six straight quarters in Mainland China, returned to double-digit growth in Hainan travel retail, and returned to growth in the U.S. led by The Ordinary ad M·A·C, while guiding to accelerating growth through faster, locally-developed innovation and AI marketing.
On Aug. 19, EL shares skyrocketed 16.3% after reporting its Q4 results. Its adjusted EPS of $0.39 beat Wall Street expectations of $0.32. The company’s revenue was $3.63 billion, surpassing Wall Street forecasts of $3.55 billion. EL expects full-year adjusted EPS in the range of $3.10 to $3.35.
EL’s rival, e.l.f. Beauty, Inc. (ELF) shares have taken the lead over the stock, with a 37.2% uptick on a YTD basis, but lagged behind the stock with 24.4% losses over the past 52 weeks.
Wall Street analysts are reasonably bullish on EL’s prospects. The stock has a consensus “Moderate Buy” rating from the 27 analysts covering it, and the mean price target of $105.52 suggests a potential upside of 3.8% from current price levels.
