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Estee Lauder (EL) Stock Sinks As Market Gains: What You Should Know

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Estee Lauder (EL - Free Report) closed the most recent trading day at $262.25, moving -0.52% from the previous trading session. This change lagged the S&P 500's 0.34% gain on the day. Meanwhile, the Dow gained 0.64%, and the Nasdaq, a tech-heavy index, added 8.98%.

Prior to today's trading, shares of the beauty products company had gained 5.77% over the past month. This has outpaced the Consumer Staples sector's gain of 0.17% and the S&P 500's gain of 1% in that time.

Estee Lauder will be looking to display strength as it nears its next earnings release, which is expected to be February 2, 2023. In that report, analysts expect Estee Lauder to post earnings of $1.30 per share. This would mark a year-over-year decline of 56.81%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.57 billion, down 17.5% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.35 per share and revenue of $16.59 billion. These totals would mark changes of -26.1% and -6.45%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Estee Lauder. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Within the past 30 days, our consensus EPS projection has moved 0.02% lower. Estee Lauder is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Estee Lauder currently has a Forward P/E ratio of 49.25. For comparison, its industry has an average Forward P/E of 32.81, which means Estee Lauder is trading at a premium to the group.

Meanwhile, EL's PEG ratio is currently 5.15. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Cosmetics stocks are, on average, holding a PEG ratio of 1.9 based on yesterday's closing prices.

The Cosmetics industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 46, putting it in the top 19% 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.

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