The Estee Lauder Companies Inc

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EL : NYSE : Consumer Goods
$84.02 | %
Today's Range: 0.0 - 0.0
Avg. Daily Volume: 2200200.0
02/23/17 - 4:01 PM ET

Financial Analysis


LAUDER (ESTEE) COS INC's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. LAUDER (ESTEE) COS INC has weak liquidity. Currently, the Quick Ratio is 0.71 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 5.25% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)3208.03124.8
EBITDA ($mil)780.0755.2
EBIT ($mil)667.0651.0
Net Income ($mil)428.0446.2


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)1675.01414.2
Total Assets ($mil)11212.08582.1
Total Debt ($mil)4033.01981.7
Equity ($mil)3793.03603.8


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin83.7984.49
EBITDA Margin24.3124.16
Operating Margin20.7920.83
Sales Turnover1.011.29
Return on Assets9.6413.75
Return on Equity28.532.75
Debt Q2 FY17 Q2 FY16
Current Ratio1.071.81
Debt/Capital0.520.35
Interest Expense22.017.0
Interest Coverage30.3238.29


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)366.14369.39
Div / share0.340.3
EPS1.151.19
Book value / share10.369.76
Institutional Own % n/a n/a
Avg Daily Volume2057212.01820341.0

Valuation


BUY. LAUDER (ESTEE) COS INC's P/E ratio indicates a premium compared to an average of 24.11 for the Personal Products industry and a premium compared to the S&P 500 average of 26.35. Conducting a second comparison, its price-to-book ratio of 8.04 indicates a significant premium versus the S&P 500 average of 2.94 and a premium versus the industry average of 7.68. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, LAUDER (ESTEE) COS INC proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
EL 28.71 Peers 24.11   EL 18.47 Peers 20.33

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

EL is trading at a premium to its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

EL is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
EL 22.44 Peers 21.09   EL 2.36 Peers 2.03

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

EL is trading at a premium to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

EL trades at a premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
EL 8.04 Peers 7.68   EL -7.06 Peers -2.99

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

EL is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, EL is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
EL 2.68 Peers 2.16   EL 2.84 Peers -0.12

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

EL is trading at a premium to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

EL has a sales growth rate that significantly exceeds its peers.

 

 

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