EL - Embedded Expectations Analysis - 2020 07 08
The Estée Lauder Companies Inc. (EL:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 38.0x Uniform P/E, implying bullish expectations for the firm. However, management may be concerned about travel sales declines, store closures, and their innovation capabilitiesSpecifically, management may lack confidence in their ability to sustain revenue growth in China, fine-tune their business strategies, and maintain personalized services and curated and targeted communication for La Mer. Moreover, they may have concerns about retail store closures in Europe, the Middle East and Africa, declines in travel consumer traffic around the world, and their share repurchase activity. Furthermore, they may lack confidence in their ability to improve travel retail sales, pursue innovation in Asia, and execute their brand loyalty innovation plan. Finally, they may be exaggerating the productivity of brick-and-mortar stores that can survive the downturn and their ability to strengthen their organization in the long term
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.
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