Back to top

Image: Bigstock

Estee Lauder (EL) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

Estee Lauder (EL - Free Report) closed at $247.99 in the latest trading session, marking a +0.75% move from the prior day. This change lagged the S&P 500's 1.83% gain on the day. At the same time, the Dow added 1.4%, and the tech-heavy Nasdaq gained 0.09%.

Prior to today's trading, shares of the beauty products company had lost 7.33% over the past month. This has lagged the Consumer Staples sector's loss of 3.95% and the S&P 500's loss of 5.51% in that time.

Estee Lauder will be looking to display strength as it nears its next earnings release. On that day, Estee Lauder is projected to report earnings of $1.33 per share, which would represent a year-over-year decline of 29.63%. Our most recent consensus estimate is calling for quarterly revenue of $4 billion, down 8.91% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.52 per share and revenue of $18.48 billion, which would represent changes of +3.87% and +4.18%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Estee Lauder. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 6.1% lower. Estee Lauder currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Estee Lauder has a Forward P/E ratio of 32.75 right now. This represents a premium compared to its industry's average Forward P/E of 30.52.

It is also worth noting that EL currently has a PEG ratio of 3.3. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. EL's industry had an average PEG ratio of 1.99 as of yesterday's close.

The Cosmetics industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 150, which puts it in the bottom 41% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

The Estee Lauder Companies Inc. (EL) - free report >>

Published in