Should You Buy Estee Lauder Stock After A 36% Decline Since 2021?

Despite a 4% fall year-to-date, at the current levels, Estee Lauder stock (NYSE: EL) looks appropriately priced, in our view. EL stock fell from $254 in early January to $237 now. The YTD -4% return for EL marks an underperformance with the broader S&P500 index, up 3%. Looking at a slightly longer term, EL stock is down 36% from levels seen in late 2021, compared to a 17% fall in the broader S&P500 index. This 36% fall for EL can be attributed to 1. the company’s P/S ratio, which plunged 37% to 5.2x trailing revenues from 8.3x in 2020, partly offset by 2. Estee Lauder’s Revenue, which grew a modest 0.9% to $16.4 billion over the last twelve months, compared to $16.2 billion in 2021, and 3. a 1.2% fall in its total shares outstanding to 361 million currently. Our dashboard – Why Estee Lauder Stock Moved – details the factors behind this move.

Estee Lauder is an American multinational manufacturer and marketer of skincare, makeup, fragrance, and hair care products, with a presence in global markets. Skin care sales are the largest contributor to the company’s net sales, bringing in 56% ($9.9 billion) of Estee Lauder’s revenues in fiscal 2022. The company benefited from a travel recovery and opening up of economies in fiscal 2022. However, this momentum has now cooled off, and China’s recent lockdowns have weighed on its sales growth. Skincare revenues plunged 20% to $4.5 billion for the six months ending Dec 2022. Fragrance and makeup product sales also witnessed a decline over this period.