EL - Embedded Expectations Analysis - 2021 01 26
The Estée Lauder Companies Inc. (EL:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 40.0x Uniform P/E, implying bullish expectations for the firm. However, management may have concerns about their growth in Asian markets, the sustainability of Asian and mature client consumption, and their online businessSpecifically, management may lack confidence in their ability to sustain growth and recovery in Asian markets, as well as maintain their Chinese consumption levels. Management may also be exaggerating the importance of market specialization in Korea's fragrance market and the sustainability of hair care demand and innovation. Furthermore, they may lack confidence in their ability to offer better online services that will attract new consumers, maintain the strong performance of their Estée Lauder and La Mer brands in Asia, and sustain the performance of their body and home fragrances. Moreover, they may have concerns about the pace of the economic recovery in the U.S. and Europe, the sustainability of their mature consumer demographic spending, and the timeline for a return of international travel traffic
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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