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Is Estee Lauder Companies Inc (EL) Stock Over or Undervalued?

Friday, September 29, 2023 03:15 PM | InvestorsObserver Analysts

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Is Estee Lauder Companies Inc (EL) Stock Over or Undervalued?

InvestorsObserver gives Estee Lauder Companies Inc (EL) a weak valuation score of 23 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. EL currently holds a better value than 23% of stocks based on these metrics. Long term investors focused on buying-and-holding should find the valuation ranking system most relevant when making investment decisions.

Valuation Rank - 23
EL gets a 23 Valuation Rank today. Find out what this means to you and get the rest of the rankings on EL!

Metrics Analysis

EL's trailing-12-month Price to Earnings (PE) ratio of 49.64 puts it above the historical average of roughly 15. EL is a poor value at its current trading price as investors are paying more than what its worth in relation to the company's earnings. EL's trailing-12-month earnings per share (EPS) of 2.79 does not justify what it is currently trading at in the market. Trailing PE ratios, however, do not factor in a company's projected growth rate, resulting in some firms having high PE ratios due to high growth potentially enticing investors even if current earnings are low.
EL currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 3.09. The market is currently overvaluing EL in relation to its projected growth due to the PEG ratio being above the fair market value of 1. EL's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.


All together these valuation metrics paint a pretty poor picture for EL at its current price due to a overvalued PEG ratio despite strong growth. The PE and PEG for EL are worse than the average of the market resulting in a valuation score of 23. Click Here to get the full Report on Estee Lauder Companies Inc (EL) stock.

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