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

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Estee Lauder (EL - Free Report) closed at $244.63 in the latest trading session, marking a +1.75% move from the prior day. This change outpaced the S&P 500's 1.42% gain on the day. At the same time, the Dow added 1%, and the tech-heavy Nasdaq gained 5.16%.

Heading into today, shares of the beauty products company had lost 1.08% over the past month, lagging the Consumer Staples sector's gain of 1.24% and the S&P 500's gain of 0.27% in that time.

Wall Street will be looking for positivity from Estee Lauder as it approaches its next earnings report date. The company is expected to report EPS of $0.49, down 74.21% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.72 billion, down 12.45% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.97 per share and revenue of $16.9 billion. These totals would mark changes of -31.35% and -4.71%, respectively, from last year.

Any recent changes to analyst estimates for Estee Lauder should also be noted by investors. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.11% higher within the past month. Estee Lauder is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Estee Lauder is holding a Forward P/E ratio of 48.4. Its industry sports an average Forward P/E of 34.43, so we one might conclude that Estee Lauder is trading at a premium comparatively.

We can also see that EL currently has a PEG ratio of 5.27. 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. The Cosmetics industry currently had an average PEG ratio of 2.18 as of yesterday's close.

The Cosmetics industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 99, putting it in the top 40% 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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