Is Estee Lauder Companies Inc (EL) overvalued?
On Equity Rank's model estimate, EL trades 170% above its fair value. Estee Lauder Companies Inc (EL) last closed at $110.06; the multi-method model fair value is $40.72.
| Price | Model fair value | Price vs model |
|---|---|---|
| $110.06 | $40.72 | 170% above |
What the answer rests on
- 0 of 10 valuation methods put EL's value above its price and 10 put it below, so the methods mostly agree.
- To justify today's price, EL's free cash flow would need to grow about 14.4% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -30.6% a year.
- EL trades at 112.0 times its last year's earnings, against a median of 17.8 for 47 profitable Consumer Staples companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 14% above to 164% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind EL's fair value · What prices assume · Other companies