EL - Embedded Expectations Analysis - 2018 10 16
The Estée Lauder Companies Inc. (EL:USA) currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 26.5x Uniform P/E, implying bullish expectations for the firm. However, management may be concerned about their British and Chinese markets, outlook for retail, and foreign exchange headwindsSpecifically, management may lack confidence in their ability to maintain strong sales across their businesses, and to sustain rapid growth across their brands and channels in China. Also, they may be concerned about poor consumer confidence in the U.K. due to Brexit, and about the sustainability of improving retail performance in U.S. department stores. Additionally, they may lack confidence in their expectation for retail in the U.S. to gain strength after rationalizing their assets, and may be concerned that their increased presence on Tmall is negatively impacting their department store growth in China. Furthermore, they may lack confidence in their ability to meet elevated sales targets, and may be concerned about foreign exchange headwinds impacting their FY18 results
Estee Lauder Companies is a manufacturer and marketer of skin care, makeup, fragrance and hair care products. The company's products are sold under a number of brand names including: Estee Lauder, Clinique, Origins, MzAzC, Bobbi Brown, La Mer, Jo Malone London, Aveda and Too Faced. The company is also the global licensee for fragrances, cosmetics and/or related products sold under various designer brand names. The company's products include skin care, makeup and related items such as compacts, brushes and other makeup tools, fragrance sold in various forms, hair care, and other ancillary products and services.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.